Adtech company Perion Network acquiring Hivestack for $100 million
Adtech company Perion Network acquiring Hivestack for $100 million
"We want to expand and we are continuing to talk with other companies. We expect that we’ll complete another purchase in 2024," said Perion CEO Tal Jacobson
Israeli company Perion Network has announced the acquisition of Hivestack for $100 million in cash. Perion could pay up to an additional $25 million (in cash and equity) structured as a three-year employee retention and performance-based payment plan.
Hivestack, headquartered in Montreal, Canada, employs 154 people. It has developed a digital out of home (DOOH) advertising platform which aims to transform ordinary public spaces into dynamic experiences, engaging audiences with eye-catching, personalized content in real-time. Hivestack’s platform is used by many of the world's largest brands, agencies, media owners, and partners including Uber, Colgate, Lego, InterContinental Hotel Group, Doordash, GroupM, dentsu, The Trade Desk, Xandr, Clear Channel, Lamar, Stroër, and many more.
"We are excited about the acquisition of Hivestack, which both complements and advances our long-term growth strategy. Hivestack’s DOOH technology platform stands out by offering brands and advertisers what they crave the most: high-visibility creative, precise targeting, immediate impact, wide reach and measurement," said Tal Jacobson, CEO of Perion. "In addition to advancing our diversification strategy, this transaction aligns with our objective to expand our technological capabilities and product offerings, and we will continue to pursue additional inorganic growth opportunities."
Prior to the acquisition, Perion was sitting on half a billion dollars, which constitutes about 40% of the value of the company that is traded in New York and Tel Aviv with a market cap of $1.3 billion. Unlike shares of many technology companies, Perion's share has maintained a positive return throughout the last year and in the last five years it has jumped eightfold in light of the continuous improvement in operational performance.
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Half a year ago, CEO Tal Jacobson took office, replacing Doron Gerstel, who led a turnaround in the company. Now the new CEO, who was recently added to the board of directors, plans to lead a strategy of acquisitions and told Calcalist that the current acquisition is only the first in a series. "We want to expand and we are continuing to talk with other companies. We expect that we’ll complete another purchase in 2024," said Jacobson. Before being appointed CEO, Jacobson managed the search division of Perion and previously was among the first employees at Similarweb, where he held senior positions.
Perion is one of the oldest technology companies in Israel that was founded back in 1999 as a tool bar company and has since gone through various incarnations. Today it operates in all the main digital advertising channels - including search advertising, social media, display, video and CTV advertising. In the first three quarters of 2023, Perion recorded revenues of $509 million, reflecting an 18% growth compared to the corresponding period. Excluding payments to intermediaries (ex-TAC) revenues amounted to $220 million and the net profit was $78 million. The cash flow from operations reached $105 million, so the current purchase will not particularly burden Perion. It is expected to end 2023 with revenues of $730-750 million, 16% growth compared to 2022.
Jefferies LLC acted as financial advisor to Perion.
