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2013 M&A: More Big Deals, And A Flood Of Marketing Tech

JEGI-2013Although marketing industry deal activity was flat in 2013, the sector saw some eye-popping deal sizes, according to boutique investment bank Jordan, Edmiston Group Inc.'s (JEGI) annual review of mergers and acquisitions.

In 2012, many of the biggest deals in 2012 tracked by JEGI involved consumer brands (Yahoo, Kayak), with only two marketing industry mergers coming in above $1 billion (Dentsu/Aegis and Nielsen/Arbitron). By contrast, 2013 saw a preponderance of large marketing deals. Among all the acquisitions JEGI tracks, four of the top five were in its marketing and interactive services (MIS) sector.

Overall, the marketing sector saw 479 transactions valued at $45.1 billion, according to JEGI. That represents a near doubling of last year's tally, an astonishing growth figure -- that is, until you realize half that value is attributable to the $21.9 billion megamerger of Publicis Groupe and Omnicom Group, announced in July and expected to close this quarter. With POG removed from the equation, the total deal volume and deal value in the MIS category looked about equal to the previous year.


Turn Raising New Round At $650M-$700M Valuation

turn-raiseTurn Inc. is seeking new funding at a valuation up to $700 million, ahead of a probable IPO in 2014.

Sources say the demand-side (DSP) and data management platform (DMP) company has been calling on investors in recent months seeking a new strategic round. These investors have gotten a peek under the hood at Turn's financials.

In 2012, they say, its gross media revenues were $230 million, and the company is on a run rate of around $350 million for this year. Next year's revenues are expected to be in the $500 million range, with global expansion a key focus. Gross margins are around 25%.

Unlike an ad network-focused company such as Rocket Fuel, Turn has a diversified business with multiple products and revenue models. In addition to software fees from its DSP and DMP tools, the 8-year-old company also charges some clients for managed services.

Turn has been through some gyrations over the years, evolving from a pure media execution play into a more holistic data-driven marketing platform with the launch of its DMP, Turn Audience Suite, in 2011.


Criteo Goes Public, And Stock Jumps 30%

criteo-ipoFrench retargeter Criteo has officially gone public, and would seem to be riding the same wave of algorithmic enthusiasm that buoyed Rocket Fuel's IPO last month.

Within an hour of beginning trading on NASDAQ at $31 per share, CRTO jumped 33% to $41. The price puts its market cap is $2.26 billion -- about on par with Rocket Fuel -- and gives it approximately $228 million in public money financing, which it will spend on capital expenditures and, potentially, acquisitions.

The early pop echoes Rocket Fuel's experience. After going public at $29 on September 20, FUEL's share price more than doubled to $62 by late morning on that day. Since then it has fallen back slightly to $56.95 at a $1.85 billion valuation, as of this morning. Rocket Fuel enjoyed a small bump in its stock price immediately after Criteo began trading.

The pre-Halloween debut is appropriate, as Criteo's IPO is scary to some.


Criteo Bumps Share Price Again, Will Raise $230M In Halloween IPO


Updated: Criteo went public Wednesday morning at $31, and is now trading at $41.

On Monday we noted that Criteo's underwriters had increased the target price for its upcoming IPO to $27-$29, exactly the range where Rocket Fuel debuted last month. Now comes word that the price has gone up again, this time to $31 -- giving the company a market cap just shy of $2 billion.

At the new price, Criteo would raise $228 million -- a lot of scratch for capital expenditures and potential acquisitions.

Also, despite our earlier report that the company's stock could begin trading as early as Tuesday, the IPO's underwriters have decided to stick to their original plan. That means the company will probably begin trading on Thursday, Oct. 31, under the NASDAQ ticker symbol CRTO.

The Halloween debut is fitting, as Criteo's IPO is scary to some.

Observers, some of them anyway, worry that a ghoulish obsession with "programmatic technology" could fuel another ad-tech bubble -- and that rather than follow The Shining example of Rocket Fuel's IPO last month, the debut of CRTO could mark the start of a long Night of the Living Dead for ad-tech IPO aspirants.


Criteo Accelerates IPO, Could Price Tonight And Begin Trading Tomorrow

criteo-prices-higherThe second big "ad-tech IPO" in as many months is upon us.

French retargeting firm Criteo is now expected to price its public offering tonight, a couple of days earlier than previously planned. And the deal's underwriters have bumped the target price from $23-$26 to $27-$29, suggesting strong demand in the wake of senior management's IPO road show.

Criteo aims to sell 7.2 million shares. With the new target price, that  means it stands to raise $194 million to $208 million for capital expenditures and acquisitions. From a pure fundraising standpoint, the higher investor buzz means the company stands to grab $30 million to $60 million more than it thought likely last week.

The target price is very close to what Rocket Fuel targeted prior to its own public listing last month, but that doesn't mean CRTO's share price will spike more than 100%, as FUEL's did immediately after its IPO.


VCs Talk Location-Based Services And Why It’s Hard To Invest In Hyperlocal Startups

StreetFightLocation-based startups that allow advertisers to personalize their offers and provide other customized services are quickly becoming a highly lucrative space.

Google recently bought Waze, the geography-based navigation application, for approximately $1 billion and Foursquare is exploring an IPO. Panelists Matt Turck, managing director of First Mark Capital, and Ben Siscovick, a former partner of IA Ventures, discussed their views on the growth of location-based services with moderator Jason Klein, CEO of On Grid Ventures, yesterday at the Street Fight Summit. Read on for highlights of the panel discussion.

JASON KLEIN: What are some of the most attractive investment opportunities out there?

MATT TURCK: I’m closely following the B2B space, specifically for local. If you look at the history, a lot of successful investments and exits have been made and a lot has been done on the demand aggregation side in terms of extracting information and giving it to advertisers so they can make money. I think there are a lot of opportunities on the supply side that hasn’t been explored.

There is also the fact that software is now so easy to build and customize that you can provide software for SMBs at a low cost. I’m interested in the automation of the SMB space, things that large companies can already do and how that is trickling down to SMBs.

Another area is the convergence of physical and digital. One of the interesting things is Apple using iBeacon. It’s this concept of using Bluetooth low energy, which is by default in everybody’s iPhone as long as you have iOS7. Using that technology, Apple enables retail stores to deploy small bits of hardware that can broadcast data to enable in-store, real-time interactions and the personalization of offers, which is interesting.


Rocket Fuel's $1.8 Billion Market Cap: How Does It Stack Up?


Depending on who you ask, Rocket Fuel's stunning IPO is either a new dawn for programmatic media investment or a scary bubble indicator.

In either case, it clearly went better than the company and investors planned. For comparison, we looked at how its nearly $2 billion market cap stacks up against other big companies in the space.

*Washington Post sold to Jeff Bezos for $250 million

M&A Activity Dropped in Q1 2013, Deals Down 38%

jegi-stackThe first quarter of 2013 was marked by some notable acquisitions—Google acquired Channel Intelligence; Twitter snapped up Bluefin Labs and Facebook agreed to buy Microsoft’s Atlas DMT. Merger and acquisition activities for marketing and other sectors have generally cooled down, however, according to a new report from The Jordan, Edmiston Group, Inc. (JEGI), an investment bank for media, information, marketing services and technology.

The value of deals announced in the first quarter of 2013 declined 38% from $12.2 billion in Q1 2012, with fewer large transactions. Marketing and interactive services saw 118 transactions and more than $2.5 billion of value in this year’s first quarter, down from the same quarter last year by 13% and 14%, respectively.

Following last year’s year-end rush to close deals prior to the impending tax changes, the slowdown was not a surprise, Adam Gross, CMO at JEGI, told AdExchanger. "Given the historically strong run last year, it was clear there was going to be a dip and we may even see a dip the first half of this year," Gross said. "Despite that, marketing and interactive services is still a healthy market with a mix of strategic acquirers from traditional agencies and software companies. We’re also seeing a growing presence from private equities."


The Weather Channel Aims For 'Underground' Tech Audience

The Weather Channel's acquisition of meteorological data company The Weather Underground (see release) may not provide the cable network and app operator with any immediate abilities to better predict rain or shine, but it does give it access to a well-regarded tech company that can help it lay the groundwork for new products and a wider audience.

In essence, TWC is a lifestyle and media property. The Weather Underground, best known for its radar and stats heavy Wunderground site, can help TWC attract a more tech-oriented audience of roughly 11 million monthly users and connect more directly with affiliates in Silicon Valley and in other parts of the world.

"Our goal is to have multiple brands," TWC chairman and CEO David Kenny told AdExchanger. "This will help us focus on what we do best: develop new products, while The Weather Underground concentrates on creating tools and packaging data in a way that will broaden our usage by consumers and marketers. The acquisition is a recognition that not everyone wants the weather in exactly the same way."


Video 'Discovery' Platform Taboola Raises $10 Million Third Round

taboolaTaboola, a video recommendation app platform that publishers can put on their sites in an attempt to boost traffic and views, has raised a $10 million third round that reflects the continuing rise of online video ad dollars and the intense competition for them.

In an interview, Adam Singolda, the founder and CEO of Israeli/New York-based Taboola, outlined plans to hire more engineers at the 45-person company and to place its video distribution network on Microsoft's Xbox Live and Google TV, two platforms that are increasingly attracting interest from media buyers as an extension of web-based video ads.

The funding round, from Marker LLC, will go to support Taboola's primary business, the Taboola EngageRank, which claims to create 500 million recommendations daily served to over 130 million users per month.