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illumin Holdings Inc T.ILLM

Alternate Symbol(s):  ILLMF

illumin Holdings Inc. provides a journey advertising platform, which enables marketers to reach consumers at every stage of their journey by leveraging advanced machine learning algorithms and real-time data analytics. It enables marketers to connect intelligently with audiences across video, mobile, social and online display advertising campaigns. Its Programmatic Marketing Platform, powered by machine learning technology, is at the core of its business, accompanied by patented solutions for analytics-led video and mobile targeting that leverages data. It enables marketers by offering near real-time reporting and analytics, bringing accountability to programmatic advertising to deliver business results and help solve the challenges that digital advertisers face. Its illumin software enables creation of consumer journeys with custom messages tied to the propensity-scored audience. Its customers include both agencies and brands, including enterprises and small to mid-sized businesses.


TSX:ILLM - Post by User

Bullboard Posts
Post by Wallstreetjackon Mar 13, 2017 12:13pm
198 Views
Post# 25971464

Virtus Advisory Commentary on Acquisition

Virtus Advisory Commentary on AcquisitionLast Thursday, AcuityAds (TSXV:AT) announced that they intend to acquire a Boston-based company, Visible Measures, a programmatic advertising platforms that provides video advertising solutions and analytics. Visible Measures has its own proprietary technology that further expands Acuity’s reach into the emerging programmatic video market, as well as a solution that can be plugged into the company’s self-serve platform, which is the most scalable part of Acuity’s business. We will cover this in more detail shortly, but first the acquisition details:
 
  • Combined TTM revenue (pro forma) for AcuityAds as of December 31, 2016 including an additional 8-months of revenue from 140 Proof, is $75m CAD. A TTM revenue base of Acuity as one entity in 2016 and Visible measures accounts to $70m in revenue.
  • Visible Measures has been acquired for $10m USD in an all-cash transaction for 100% of the existing shares.
  • The deal has been financed through a Bought Deal for $10.2m at $3.40 per share offering by a syndicate co-lead by Haywood Securities and Paradigm Capital. An over-allotment option exists for an additional $1.5 million dollars.
 
As with the acquisition of 140 Proof in summer 2016, this deal is both accretive to shareholders and provides a significant revenue boost. We point out that to minimize shareholder dilution further, three of the four founders of the company have elected to sell a total of 1 million of their own shares as part of this bought-deal.
 
As well, we will point out a little academic corporate finance theory regarding mergers and acquisitions:

More often than not, firms that are bullish on an acquisition want to proceed with an all-cash payment to mitigate any shareholder dilution and recognize the synergies in full for their existing shareholders. When management believes their own stock is overvalued, they prefer to make payment in shares as this technically reduces the price they pay for the stock
 
Thus, this transaction should be very indicative of the fact Acuity’s management is incredibly bullish on the stock price.
 
With all that out of the way, let’s take a look at what Acuity paid to purchase visible measures and how it stands up to other acquisitions in the ad-tech space. Again, we ask readers to keep in mind that Visible Measures has its own proprietary technology.
 
 
 
 
 
Acquirer Target Multiple Note Acquisition Price*
AcuityAds Visible Measures 0.5x revenue Proprietary video-ad DSP and analytics tool $10m
Yellow Pages Juice Mobile 1.4x revenue Proprietary mobile RTB/DSP platform $35m
The Rubicon Project Chango 2.84x Revenue Search retargeting platform $122m
Centro SiteScout 2x Revenue Proprietary DSP $40m
Matomy Media Group Optimatic 15.6x EBIT Programmatic monetization platforms for video advertisers $25m+ earn-outs
*All prices in USD except Juice Mobile
 
An all-cash deal allows for a cheaper multiple as the target management faces more certainty. However, any way you slice it this deal is a steal for Acuity. The multiples above speak for themselves when it comes to acquisition prices in the ad-tech space. We believe with Acuity’s world-class management and evidently strong sales approach, the company will be able to take the Visible Measures data analytics tool into the hands of advertisers in North America and Europe. The synergies between the two companies are obvious, and we expect that AcuityAds will face very little increase in operational expenses relative to the tremendous revenue boost it receives even without taking into consideration the upselling opportunities. 

Disclaimer 

 

This newsletter contains “forward-looking information” which may include, but is not limited to, statements with respect to the activities, events or developments that the companies mentioned expect or anticipate will or may occur in the future. Such forward-looking information is often, but not always, identified by the use of words and phrases such as “plans,” “expects,” “is expected,” “budget,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates,” or “believes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may,” “could,” “would,” “might” or “will” be taken, occur or be achieved.

 

The information and recommendations made available here through our emails, newsletters, website, press releases, collectively considered as (“Material”) by Virtus Advisory Group Inc. (“Virtus” or “Company”) is for informational purposes only and shall not be used or construed as an offer to sell or be used as a solicitation of an offer to buy any services or securities. Virtus does not guarantee the accuracy of the information provided in its Material. You hereby acknowledge that any reliance upon any Materials shall be at your sole risk. In particular, none of the information provided in our monthly newsletter and emails or any other Material should be viewed as an invite, and/or induce or encourage any person to make any kind of investment decision. The recommendations and information provided in our Material are not tailored to the needs of particular persons and may not be appropriate for you depending on your financial position or investment goals or needs. You should apply your own judgment in making any use of the information provided in the Company’s Material, especially as the basis for any investment decisions. Securities or other investments referred to in the Materials may not be suitable for you and you should not make any kind of investment decision in relation to them without first obtaining independent investment advice from a qualified and registered investment advisor. You further agree that neither Virtus, its employees, affiliates consultants, and/or clients will be liable for any losses or liabilities that may be occasioned as a result of the information provided in any of the Company’s Material. Virtus is not registered as an adviser under the securities legislation of any jurisdiction of Canada and provides Material on behalf of its clients pursuant to an exemption from the registration requirements that is available in respect of generic advice. In no event will Virtus be responsible or liable to you or any other party for any damages of any kind arising out of or relating to the use of, misuse of and/or inability to use the Company’s website or Material. The information is directed only at persons resident in Canada. The Company’s Material or the information provided in the Material shall not in any form constitute as an offer or solicitation to anyone in the United States of America or any jurisdiction where such offer or solicitation is not authorized or to any person to whom it is unlawful to make such a solicitation. If you choose to access Virtus’s website and/or have signed up to receive the Company’s monthly newsletter or any other Material, you acknowledge that the information in the Material is intended for use by persons resident in Canada only. Virtus is not an investment advisory, and Material provided by Virtus shall not be used to make investment decisions. Information provided in the Company’s Material is often opinionated and should be considered for information purposes only. No stock exchange anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. Virtus and/or its principals and employees may have positions in the stocks mentioned in the Company’s Material, and may trade in the stocks mentioned in the Material. Do not consider buying or selling any stock without conducting your own due diligence and/or without obtaining independent investment advice from a qualified and registered investment advisor.

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