NEW YORK, Jan. 25, 2021 /PRNewswire/ --
- Taboola is going public via a merger with ION Acquisition Corp.
1 Ltd. (NYSE: IACA), a publicly traded special purpose acquisition
company, or SPAC, with $259 million
in trust
- Taboola has also secured approximately $285 million in primary and secondary PIPE
financing from institutional investors, including funds affiliated
with ION and funds affiliated with Phoenix Insurance, that have
committed to fund more than 20% of the PIPE
- Top tier institutional investors are anchoring the PIPE
including Fidelity Management & Research Company LLC, Baron
Capital Group, funds and accounts managed by BlackRock, Hedosophia,
the Federated Hermes Kaufmann Funds and others
- Exor Seeds, the venture arm of
Exor (holding company controlled by the Agnelli family) is joining
the PIPE as Taboola envisions distributing personalized content
into mobility platforms
- Taboola is focused on providing Open Web digital properties
(including websites, devices, TV apps and mobile apps that sit
outside of walled gardens) with the infrastructure they need to
build, grow and monetize their online activities
- The transaction implies a pro forma valuation of approximately
$2.6 billion for Taboola and Taboola
expects to have $600 million of cash
and cash equivalents on its balance sheet at closing
- In 2021 Taboola plans to invest more than $100 million in R&D growth initiatives
including AI, eCommerce, TV, and device manufacturers
- As part of its presentations to the PIPE investors, for 2020
Taboola projected* it would achieve approximately $1.2 billion of Revenues, over $375 million of ex-TAC Revenues**, approximately
$34 million of Operating Income,
representing approximately 3% of Revenues, and over $100 million of Adjusted EBITDA**, representing
approximately 27%** of ex-TAC Revenues
- Prior to this transaction Taboola raised $160 million and had approximately $240 million of cash and cash equivalents on its
balance sheet as of December 31,
2020.
- Taboola's recommendation platform, powered by advanced AI
algorithms, provides over 1 trillion recommendations a month to
approximately 500 million daily active users
- Most members of Taboola's senior management team have been
together for almost a decade
- Transaction expected to close in Q2 of 2021
Taboola, a global leader in powering recommendations for the
open web, helping people discover things they may like, today
announced it has entered into a definitive merger agreement with
ION Acquisition Corp. 1 Ltd. (NYSE: IACA), a special purpose
acquisition company. The combined company will operate under the
Taboola name and will trade on the NYSE under the new symbol
"TBLA". The transaction is expected to close in Q2 of 2021.
Taboola was founded in 2007 by Adam Singolda, the company's CEO
since inception. The company enables digital property owners to
harness the value of AI-driven recommendations and offers
advertisers a way to effectively access users in the open web.
Taboola surfaces recommendations wherever people spend time outside
of the walled gardens, across websites and within offerings from
device manufacturers, mobile apps, and games, enabling advertisers
to be recommended side-by-side with editorial content, driving
significant value.
Taboola's mission is to power recommendations for the open web
and help people discover things they may like. Taboola estimates
the highly fragmented advertising market in the open web to be
approximately $64 billion in 2020.
Taboola's recommendation platform renders editorial and paid
recommendations natively, creating meaningful value to its digital
property partners, advertisers and users. As a result, the company
believes it has a significant market opportunity.
Taboola at scale - selected highlights:
- More than 9,000 digital properties with long-term, global and
exclusive partnerships, including publishers like CNBC, NBC News,
Business Insider, The Independent and El Mundo during Q4 2020.
- Device manufacturer partnerships, where Taboola brings its
publisher partners' news to consumers.
- More than 13,000 advertiser relationships, reaching 516 million
daily active users on the Taboola network in a brand safe
environment, while using Taboola's readership data for precision
targeting during Q4 2020.
- Approximately 500 team members at the end of Q4, supporting
research and development and significant investment into its
technology stack, which has made Taboola a leader in AI.
"Taboola is embarking on an exciting new journey as a public
company, a milestone only made possible by years of trusted
partnerships with tens of thousands of digital properties and
advertisers who I want to personally thank for believing in Taboola
and me for years," said Adam Singolda, Founder and CEO at Taboola.
"Today, we're proud of the Taboola team that has made us a
ubiquitous presence on the open web and for helping to bring our
category-defining technology to market. Aside from our technology
and team, Taboola's success is built on a simple idea - deliver
value to our partners in a way where we only grow if our partners
grow, in a true win-win manner. This is in stark contrast to
'walled gardens' of closed ecosystems that don't always have their
partners' best interests in mind."
Mr. Singolda continued, "As we move forward, there is immense
opportunity for Taboola to continue to be the champion for the open
web, and those who do business there. Over the next 10 years I see
Taboola growing to power recommendations for anything, such as
eCommerce, games, applications, and I see those recommendations
everywhere, on every device. They will live on our connected TVs at
home, recommending shows people love, as well as in people's cars
surfacing content they love, podcasts, and text-to-audio from the
open web. I'm excited to have Gilad
Shany join our board and journey, and I'm pleased to welcome
the ION family of investors and supporters."
Gilad Shany, CEO of ION said, "We
believe Taboola is an open web recommendation leader that is well
positioned to challenge the walled gardens. We were looking to
merge with a global technology leader with Israeli DNA and we found
that in Taboola. The combination of long-term partnerships built by
the company with thousands of open web digital properties, their
direct access to advertisers, massive global reach and proven AI
technology, allows Taboola to provide significant value to their
partners while also achieving attractive unit economics as the
company grows. We are excited to join in the early innings of this
growth journey alongside a tenured executive team with a strong
track-record of exceptional execution."
Transaction Overview
ION Acquisition Corp. 1 Ltd. will
merge with a wholly-owned subsidiary of Taboola for implied pro
forma aggregate valuation of approximately $2.6 billion. In connection with the transaction,
institutional investors have committed to purchase an aggregate of
approximately $285 million of Taboola
ordinary shares in a private investment that is expected to close
concurrently with the business combination, of which approximately
$150 million will be purchased
directly from existing shareholders of Taboola, primarily from
early investors. Taboola has committed to register these
privately-issued shares for resale shortly following the closing of
the business combination. All transaction related financial
or other data in this announcement assume no ION shareholder
exercises their redemption rights.
The boards of directors of both Taboola and ION unanimously
approved the transaction. The proposed transaction is expected to
be completed in the second quarter of 2021, subject to approval by
the shareholders of each of Taboola and ION, and satisfaction of
customary regulatory and other closing conditions.
Advisors
Credit Suisse Securities (USA) LLC acted as lead financial and capital
markets advisor to Taboola and also acted as lead placement agent
on the PIPE. J.P. Morgan Securities LLC also acted as a financial
advisor to Taboola. Latham & Watkins LLP, Meitar Law Offices
and Davis Polk & Wardwell LLP
acted as legal counsel to Taboola.
Cowen acted as sole financial and capital markets advisor to ION
and also acted as placement agent on the PIPE. White &
Case LLP and Goldfarb Seligman &
Co. acted as legal counsel to ION.
*All 2020 projections in this press release are taken from the
investor presentation being filed by ION today with the SEC as an
exhibit to its Current Report on Form 8-K which will be available
on the SEC website at www.sec.gov. Those projections are
subject to the limitations contained in the presentation and in
this press release. See "Caution About Forward-Looking
Statements."
** Non-GAAP measure. See "About Non-GAAP Projected
Financial Measures."
Investor Conference Call Information
Today,
January 25 at 8:00 a.m. ET, Taboola and ION Acquisition Corp. 1
Ltd. will host a joint investor conference call regarding the
proposed transaction and review an investor presentation. The
investor presentation is being filed by ION Acquisition Corp. 1
Ltd. with the SEC prior to the call as an exhibit to a Current
Report on Form 8-K which will be available on the SEC website at
www.sec.gov.
Prepared remarks are available via audio-only webcast, and are
accessible at
http://www.taboola.com/about/investors through 11:59 p.m ET on
January 31, 2021. A transcript of the
call will also be made available on the SEC website at
www.sec.gov.
About ION Acquisition Corporation
The Company is a
blank check company incorporated for the purpose of effecting a
merger, share exchange, asset acquisition, share purchase,
reorganization or similar business combination with one or more
businesses. While the Company may pursue a business combination
target in any business or industry, the Company intends to focus on
the rapidly growing universe of Israeli companies and entrepreneurs
that apply technology and innovation to our everyday lives. The
Company is sponsored by ION Holdings 1, LP, an affiliate of ION
Asset Management Ltd
About Taboola
Taboola powers recommendations for the
open web, helping people discover things they may like. The
company's platform, powered by artificial intelligence, is used by
digital properties, including websites, devices and mobile apps, to
drive monetization and user engagement. Taboola has long-term
partnerships with some of the top digital properties in the world,
including CNBC, NBC News, Business Insider, The Independent and El
Mundo. More than 13,000 advertisers use Taboola to reach over 500
million daily active users in a brand-safe environment. The company
has offices in 18 cities worldwide, including New York and Tel
Aviv.
Learn more at www.taboola.com and follow @taboola on
Twitter.
About Non-GAAP Projected Financial Measures
This press
release contains projected financial measures that are not
calculated or presented in accordance with United States generally accepted accounting
principles, or GAAP. These measures are projected ex-TAC
Revenue, Adjusted EBITDA and Adjusted EBITDA Margin. They are
non-GAAP measures because they exclude items required to be
included in the most directly comparable projected measures
calculated and presented in accordance with GAAP. We believe
these non-GAAP measures provide useful supplemental information for
period-to-period comparisons of our business and can assist
investors and others in understanding and evaluating our operating
results. However, these non-GAAP projected measures should not be
considered in isolation or as a substitute for or superior to any
measures of projected financial performance calculated and
presented in accordance with GAAP. Other companies may calculate
these or similarly titled non-GAAP measures differently than we do.
See the Annex to this press release captioned "Non-GAAP Projection
Reconciliations" for a description of these non-GAAP projected
measures and a reconciliation to the most directly comparable
projected financial measures prepared in accordance with GAAP.
Additional Information
This communication is being
made in respect of the proposed transaction involving Taboola.com
Ltd. ("Taboola") and ION Acquisition Corp. 1 Ltd. ("ION"). This
communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of such jurisdiction. In connection with the
proposed transaction, Taboola will file with the Securities and
Exchange Commission ("SEC") a registration statement on Form F-4
that will include a proxy statement of ION in connection with ION's
solicitation of proxies for the vote by ION's shareholders with
respect to the proposed transaction and other matters as may be
described in the registration statement. Taboola and ION also plan
to file other documents with the SEC regarding the proposed
transaction and a proxy statement/prospectus will be mailed to
holders of shares of ION's Class A ordinary shares. BEFORE MAKING
ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE
FORM F-4 AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED
TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The proxy
statement/prospectus, as well as other filings containing
information about Taboola and ION will be available without charge
at the SEC's Internet site (http://www.sec.gov). Copies of the
proxy statement/prospectus can also be obtained, when available,
without charge, from Taboola's website at
http://www.taboola.com. Copies of the proxy
statement/prospectus can be obtained, when available, without
charge, from ION's website at http://www.ion-am.com/spac.
Participants in the Solicitations
Taboola, ION and
certain of their respective directors, executive officers and other
members of management and employees may, under SEC rules, be deemed
to be participants in the solicitation of proxies from ION's
shareholders in connection with the proposed transaction. You can
find more information about ION's directors and executive officers
in ION's final prospectus dated October 1,
2020 and filed with the SEC on October 5, 2020. Additional information regarding
the participants in the proxy solicitation and a description of
their direct and indirect interests will be included in the proxy
statement/prospectus when it becomes available. Shareholders,
potential investors and other interested persons should read the
proxy statement/prospectus carefully when it becomes available
before making any voting or investment decisions. You may obtain
free copies of these documents from the sources indicated
above.
No Offer or Solicitation
This communication does not
constitute an offer to sell or the solicitation of an offer to buy
any securities, or a solicitation of any vote or approval, nor
shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by
means of a prospectus meeting the requirements of section 10 of the
Securities Act, or an exemption therefrom.
Caution About Forward-Looking Statements
This
communication includes forward-looking statements, including
projections about Taboola's 2020 performance, its expected cash and
cash equivalents at the closing of the transaction, planned 2021
investments, its growth strategy and market opportunities and the
timing of the pending transaction. These forward-looking statements
are based on Taboola's and ION's expectations and beliefs
concerning future events and involve risks and uncertainties that
may cause actual results to differ materially from current
expectations. These factors are difficult to predict accurately and
may be beyond Taboola's and ION's control. Forward-looking
statements in this communication or elsewhere speak only as of the
date made. New uncertainties and risks arise from time to time, and
it is impossible for Taboola or ION to predict these events or how
they may affect Taboola or ION. Except as required by law, neither
Taboola or ION has any duty to, and does not intend to, update or
revise the forward-looking statements in this communication or
elsewhere after the date this communication is issued. In light of
these risks and uncertainties, investors should keep in mind that
results, events or developments discussed in any forward-looking
statement made in this communication may not occur. Uncertainties
and risk factors that could affect Taboola's and ION's future
performance and cause results to differ from the forward-looking
statements in this release include, but are not limited to: the
occurrence of any event, change or other circumstances that could
give rise to the termination of the business combination; the
outcome of any legal proceedings that may be instituted against ION
or Taboola, the combined company or others following the
announcement of the business combination; the inability to complete
the business combination due to the failure to obtain approval of
the shareholders of ION or to satisfy other conditions to closing;
changes to the proposed structure of the business combination that
may be required or appropriate as a result of applicable laws or
regulations or as a condition to obtaining regulatory approval of
the business combination; the ability to meet stock exchange
listing standards following the consummation of the business
combination; the risk that the business combination disrupts
current plans and operations of ION or Taboola as a result of the
announcement and consummation of the business combination; the
ability to recognize the anticipated benefits of the business
combination, which may be affected by, among other things,
competition, the ability of the combined company to grow and manage
growth profitably, maintain relationships with customers and retain
its management and key employees; costs related to the business
combination; changes in applicable laws or regulations; Taboola's
estimates of expenses and profitability and underlying assumptions
with respect to shareholder redemptions and purchase price and
other adjustments; ability to meet minimum guarantee requirements
in contracts with digital properties; intense competition in the
digital advertising space, including with competitors who have
significantly more resources; ability to grow and scale Taboola's
ad and content platform through new relationships with advertisers
and digital properties; ability to secure high quality content from
digital properties; ability to maintain relationships with current
advertiser and digital property partners; ability to make continued
investments in Taboola's AI-powered technology platform; the need
to attract, train and retain highly-skilled technical workforce;
changes in the regulation of, or market practice with respect to,
"third party cookies" and its impact on digital advertising;
continued engagement by users who interact with Taboola's platform
on various digital properties; the impact of the ongoing COVID-19
pandemic; reliance on a limited number of partners for a
significant portion of Taboola's revenue; changes in laws and
regulations related to privacy, data protection, advertising
regulation, competition and other areas related to digital
advertising; ability to enforce, protect and maintain intellectual
property rights; and risks related to the fact that we are
incorporated in Israel and
governed by Israeli law; and other risks and uncertainties set
forth in the section entitled "Risk Factors" and "Cautionary Note
Regarding Forward-Looking Statements" in ION's final prospectus
October 1, 2020 relating to its
initial public offering dated and in subsequent filings with the
SEC, including the proxy statement relating to the business
combination expected to be filed by ION. In particular, the
projections for 2020 are subject to material adjustment as Taboola
completes its closing procedures and its auditors audit its 2020
results.
Contacts
Media:
Dave Struzzi
Taboola
mediarelations@taboola.com
Investors:
Maili Bergman
The Blueshirt Group
investors@taboola.com
ION Acquisition Corp:
Avrom Gilbert
avrom@ion-am.com
Non-GAAP Projection Reconciliations
The forgoing press release contains GAAP and Non-GAAP projected
full year 2020 financial measures. See "About Non-GAAP Projected
Financial Measures" and "Caution About Forward-Looking
Statements."
These non-GAAP projected measures are subject to significant
limitations, including those identified below. In addition, other
companies may use similarly titled measures but calculate them
differently, which reduces their usefulness as comparative
measures. Non-GAAP projected measures should not be considered in
isolation or as a substitute for projected or historical GAAP
measures. They should be considered only as supplementary
information.
ex-TAC Revenues
We calculate projected ex-TAC Revenues as projected Revenues
excluding projected traffic acquisition costs, or TAC. The
following table provides a reconciliation of projected Revenues to
projected ex-TAC Revenues for the period shown.
|
|
|
Year Ended
December 31,
2020
|
|
|
|
(in
millions)
|
Revenues
|
|
|
$ 1,190
|
Adjusted to exclude
the following:
|
|
|
|
Traffic acquisition
costs
|
|
|
811
|
ex-TAC
Revenues
|
|
|
$ 379
|
We believe that ex-TAC Revenues are useful because TAC is what
we must pay digital properties to obtain the right to place
advertising on their websites, and we believe that excluding these
costs can better reflect the revenue that ultimately flows to
us.
Limitations on the use of ex-TAC Revenues include the
following.
- Traffic acquisition cost is a significant component of our Cost
of revenues but is not the only component;
- ex-TAC Revenues are not comparable to our Gross profit or
Operating income and by definition ex-TAC Revenues will be higher
than our Gross profit or Operating income.
Adjusted EBITDA and Adjusted EBITDA Margin
We calculate projected Adjusted EBITDA as projected Operating
income before depreciation and amortization, further adjusted to
exclude projected stock-based compensation, certain merger or
acquisition related costs and other noteworthy income and expense
items, which may vary from period-to-period. The following table
provides a reconciliation of projected Operating income to
projected Adjusted EBITDA for the period shown.
|
|
|
Year Ended
December 31, 2020
|
|
|
|
(in
millions)
|
Operating
income
|
|
|
$ 34
|
Adjusted to exclude
the following:
|
|
|
|
Depreciation and
amortization
|
|
|
33
|
Stock-based
compensation
|
|
|
23
|
M&A costs
(a)
|
|
|
16
|
Adjusted
EBITDA
|
|
|
$ 106
|
|
|
(a)
|
Costs primarily
related to the proposed strategic transaction with Outbrain Inc.,
which we elected not to consummate.
|
We believe that projected Adjusted EBITDA is useful because it
allows us and others to measure projected performance without
regard to items such as stock-based compensation expense,
depreciation and interest expense and other items that can vary
substantially depending on our financing and capital structure, and
the method by which assets are acquired. We use Adjusted
EBITDA and GAAP financial measures for planning purposes, including
the preparation of our annual operating budget, as a measure of
performance and the effectiveness of our business strategies, and
in communications with our board of directors. We may also
use Adjusted EBITDA as a metric for determining payment of cash or
other incentive compensation.
Limitations on the use of Adjusted EBITDA include the
following.
- Although depreciation expense is a non-cash charge, the assets
being depreciated may have to be replaced in the future, and
Adjusted EBITDA does not reflect cash capital expenditure
requirements for such replacements or for new capital expenditure
requirements;
- Adjusted EBITDA excludes stock-based compensation expense,
which has been, and will continue to be for the foreseeable future,
a significant recurring expense for our business and an important
part of our compensation strategy;
- Adjusted EBITDA does not reflect, to the extent applicable for
a period presented: (1) changes in, or cash requirements for, our
working capital needs; (2) interest expense, or the cash
requirements necessary to service interest or if applicable
principal payments on debt, which reduces cash available to us; or
(3) tax payments that may represent a reduction in cash available
to us; and
- the expenses and other items that we exclude in our calculation
of Adjusted EBITDA may differ from the expenses and other items, if
any, that other companies may exclude from Adjusted EBITDA when
they report their operating results.
We calculate projected Operating income Margin as projected
Operating income divided by projected Revenues. We calculate
projected Adjusted EBITDA Margin as projected Adjusted EBITDA
divided by projected ex-TAC Revenues. The following table
reconciles projected Operating Income Margin to projected Adjusted
EBITDA Margin for the period shown.
|
|
|
Year Ended
December 31, 2020
|
|
|
|
(in
millions)
|
Revenues
|
|
|
$ 1,190
|
Operating
income
|
|
|
$ 34
|
Operating income
Margin
|
|
|
2.8%
|
|
|
|
|
ex-TAC
Revenues
|
|
|
$ 379
|
Adjusted
EBITDA
|
|
|
$ 106
|
Adjusted EBITDA
Margin
|
|
|
27.8%
|
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