- ironSource, a leading business platform that enables mobile
content creators to prosper within the app economy, will combine
with Thoma Bravo Advantage at an implied pro forma equity value of
approximately $11.1 billion
- ironSource recorded 2020 revenue and adjusted EBITDA of
$332 million and $104 million, respectively, growing revenue at
83% year over year. With ironSource's core addressable market
projected to grow to as much as $41
billion by 2025, the combination with Thoma Bravo Advantage
creates a public company positioned for significant long-term
growth and value creation
- Transaction is expected to provide up to $2.3 billion in cash proceeds (a portion of which
will be used for purchases from ironSource equity holders),
including an oversubscribed PIPE of $1.3
billion and $1 billion of cash
held in the trust account of Thoma Bravo Advantage, assuming no
redemptions by public shareholders
- After giving effect to the transaction (and assuming no
redemptions by public shareholders), the company is expected to
have approximately $740 million of
unrestricted cash
- An affiliate of Thoma Bravo, L.P. has committed
$300 million to the PIPE;
Orlando Bravo will join ironSource's
Board of Directors at transaction closing
- Top-tier investors anchoring the PIPE include funds and
accounts managed by Tiger Global Management, LLC, Counterpoint
Global (Morgan Stanley), Nuveen, LLC, Hedosophia, Wellington
Management, The Baupost Group, and certain funds managed by
Fidelity Investments Canada ULC
TEL AVIV, Israel, and
SAN FRANCISCO, March 21, 2021 /PRNewswire/ -- ironSource, a
leading business platform for the app economy, has entered into a
definitive agreement to merge with Thoma Bravo Advantage (NYSE:
TBA) ("TBA"), a publicly-traded special purpose acquisition
company, to bring to the public markets a highly-profitable and
scalable business that provides a comprehensive business platform
for app developers. The transaction values ironSource at a pro
forma equity value of $11.1 billion,
and is supported by a $1.3 billion
oversubscribed Class A ordinary share PIPE led by an affiliate of
Thoma Bravo, L.P. ("Thoma Bravo"), as well as investments from
Tiger Global Management, LLC, Counterpoint Global (Morgan Stanley),
Nuveen, LLC, Hedosophia, Wellington Management, The Baupost Group,
and certain funds managed by Fidelity Investments Canada ULC and
other institutional investors. Upon closing of the transaction, the
combined company will operate under the ironSource name.
![](https://mma.prnewswire.com/media/1470389/Thoma_Bravo__Logo.jpg)
ironSource provides the most comprehensive business platform for
the app economy. The platform is designed to enable any app or game
developer to turn their app into a scalable, successful business by
helping them to monetize and analyze their app and grow and engage
their users through multiple channels, including unique on-device
distribution through partnerships with leading telecom operators
and OEMs such as Orange and Samsung. In 2020, ironSource grew
revenue 83% year-over-year to $332
million, with 94% from 291 customers with more than
$100,000 of annual revenue, a
dollar-based net expansion rate of 149%, and adjusted EBITDA
margins of 31%. The company serves over 2.3 billion monthly active
users across its global customer base.
As a public company, ironSource is expected to benefit from the
financial and operational support of Thoma Bravo – one of the most
experienced and successful software investors in the world. With a
track record of over 300 software investments, Thoma Bravo can
provide ironSource with unparalleled industry expertise and a
global network.
"Joining forces with Thoma Bravo Advantage to bring ironSource
to the public markets presents an opportunity to partner with the
world's leading software investor to achieve the next level of
growth," said Tomer Bar Zeev, CEO
and co-founder of ironSource. "Despite our previous progress
pursuing a traditional IPO, when we met with Thoma Bravo Advantage
we found an alignment of vision and shared conviction about the
long-term growth we can drive at ironSource that made them the
perfect partner as we take this next step in growing our company,
and the market as a whole."
"As one of the fastest-growing and most innovative platforms for
building and scaling businesses in the app economy, ironSource is
well-positioned for continued success as a public company," said
Orlando Bravo, Chairman of the Board
of Directors of Thoma Bravo Advantage, as well as a founder and
managing partner of Thoma Bravo. "With a full suite of solutions
across the app growth life cycle – and a unique combination of
scale, business growth, and profitability – we expect ironSource to
further its market leadership position as a public company. We look
forward to partnering closely with Tomer and the talented
ironSource team in this exciting next chapter for the company."
"ironSource is a one-of-a-kind software company that combines an
innovative, high-growth franchise with a deeply experienced
management team that has a track record of success in a rapidly
expanding market," said Robert (Tre)
Sayle, CEO of Thoma Bravo Advantage, as well as a partner at
Thoma Bravo. "We are thrilled to be partnering with ironSource as
it enters the public markets and to be able to provide Thoma
Bravo's deep software expertise and financial support to the
company as it continues its growth journey."
Company Overview
The app economy is one of the fastest-growing markets today,
with millions of apps available to billions of users who spend 83%
of their time on mobile devices inside apps. Within the app
economy, games are the leading category of apps, accounting for the
majority of apps in the Apple App Store in 2020 according to
Statista, and ironSource has established a strong leadership
position within this category, focusing its product
development and innovation on building core infrastructure serving
mobile game developers.
ironSource powers the business growth of 87% of the top 100
games, and has been ranked multiple times as one of the top 3
platforms for driving both quality and scaled user growth by
leading industry indexes. In addition, 14 of the 19 games published
through the ironSource platform were ranked in the top 10 most
downloaded games on either the Apple App Store or Google Play Store
over the course of 2020, and one of them – Join Clash – was the
most downloaded game in the world in February 2021.
"Our solutions cover the entire game growth cycle, from growing
your user base, to generating revenue to reinvest in growth, and
then analyzing and optimizing the entire cycle to drive
profitability," said Omer Kaplan,
CRO and co-founder of ironSource. "Using our platform, game
developers are able to unlock a flywheel of continuous growth, and
since our business model is aligned with our customer's success, as
they grow, we do too. While this cycle is most often leveraged by
mobile games, it's easily transferable to apps outside of gaming,
and today 16% of our customers with more than $100,000 of annual revenue are already from
industries beyond games."
The ironSource platform is made up of two solution suites,
ironSource Sonic ("Sonic") and ironSource Aura ("Aura"). The Sonic
solution suite supports developers as they launch, monetize, and
scale their apps and games. The Aura solution suite allows telecom
operators to enrich the device experience by creating new
engagement touchpoints that deliver relevant content for their
users across the entire lifecycle of the device. This creates a
unique on-device distribution channel for developers to promote
their apps as an integral part of the device experience.
"The Aura solution suite represents a unique value-add for
developers, allowing them to get their apps discovered on millions
of devices worldwide," said Arnon Harish, President and co-founder
of ironSource. "Equally important, however, is our ability to help
telecom operators with digital transformation, enabling them to
engage their users throughout the lifecycle of the device. By
leveraging ironSource's core capabilities around content
monetization and user engagement, we were able to quickly build and
deploy a solution suite for telecom operators that allows them to
more fully participate in the app economy."
The combination of these two solution suites serves to
differentiate the ironSource platform, making it the most
comprehensive app business platform in the market and underpinning
its market leadership. That market leadership makes ironSource the
de facto choice for customers looking to grow their app, and the
breadth of its solutions means developers of all sizes and at all
stages of growth have a way to leverage the platform. Once a
developer starts working with ironSource, they typically expand
their use to multiple solutions within the platform, driving a high
dollar-based net expansion rate and gross customer retention
rate.
"This is a very proud moment for us at Viola and for me
personally. A company where we were the first investors thrives and
goes public as one of the largest public tech companies in Israeli
history," said Shlomo Dovrat,
co-founder of Viola Ventures and board member at ironSource. "We
look forward to continuing to work with the amazing founding team
of ironSource on their incredible journey."
"We invested in ironSource in 2019 because we saw a unique
opportunity to partner with a founder-led company that not only
operated in an exciting market, but had already achieved
impressive, profitable growth and industry leadership," said
Daniel Pindur, Partner at CVC
Capital Partners. "It's been amazing to be part of ironSource's
journey so far, and incredibly rewarding to see the company enter
its next chapter of growth," added Sebastian Kuenne, Managing Director and Head of
CVC Growth Partners in Europe.
Transaction Overview
Thoma Bravo Advantage has agreed to combine with ironSource
based on a $11.1 billion pro forma
equity valuation and the transaction is supported by a $1.3 billion oversubscribed Class A ordinary
share PIPE led by a $300 million
investment by an affiliate of Thoma Bravo, as well as investments
from Tiger Global Management, LLC, Counterpoint Global (Morgan
Stanley), Nuveen, LLC, Hedosophia, Wellington Management, The
Baupost Group, and certain funds managed by Fidelity Investments
Canada ULC and other institutional investors.
The transaction, which has been unanimously approved by the
Boards of Directors of ironSource and Thoma Bravo Advantage, is
expected to close in the second quarter of 2021, subject to
customary closing conditions, including approval by Thoma Bravo
Advantage's shareholders.
Shares issued to the sponsor of Thoma Bravo Advantage will be
subject to a 12-month lock-up with limited releases based on the
trading price of the shares following the 150th day
after the closing of the transaction; nearly all of ironSource's
shareholders will be subject to a 6-month lock-up after the closing
of the transaction, subject to the same early release applicable to
Thoma Bravo Advantage.
Following the closing of the transaction, ironSource will have a
dual class equity structure whereby current shareholders of
ironSource will own Class B ordinary shares with five votes per
share and holders of Class A ordinary shares, including Thoma Bravo
Advantage's shareholders, will have one vote per share.
After giving effect to the transaction and assuming no
redemptions by the Thoma Bravo Advantage shareholders, the company
is expected to have approximately $740
million of unrestricted cash.
Total consideration to ironSource shareholders will be
$10 billion, which is expected to be
comprised of $1.5 billion in cash
consideration and a majority of the shares of the combined
company.
Upon completion of the transaction, the combined company will
retain the ironSource Ltd. name.
Advisors
Goldman Sachs & Co. LLC, Jefferies LLC and Citigroup Global
Markets Inc. are serving as financial advisors to ironSource, and
Latham & Watkins LLP and Meitar | Law Offices are serving as
legal advisors to ironSource.
Kirkland & Ellis LLP, Goldfarb
Seligman & Co. and Cadwalader, Wickersham & Taft LLP
are acting as legal advisors to Thoma Bravo Advantage.
Goldman Sachs & Co. LLC, Citigroup Global Markets Inc. and
Jefferies LLC acted as PIPE placement agents.
Investor Conference Call
For those investors that wish to listen to an investor
presentation and webcast hosted by management of ironSource and
Thoma Bravo Advantage discussing the business and the proposed
transaction, please register here www.is.com/investors.
A link to a brief investor audio call hosted by management of
ironSource and Thoma Bravo Advantage discussing the business and
the proposed transaction can be found on ironSource's investor
website at www.is.com/investors.
The investor presentation is being filed by ironSource and Thoma
Bravo Advantage with the Securities and Exchange Commission ("SEC")
and will be available on the company's investor relations website
and on the SEC's website at www.sec.gov.
About ironSource
ironSource is a leading business platform that enables mobile
content creators to prosper within the app economy. App developers
use ironSource's platform to turn their apps into successful,
scalable businesses, leveraging a comprehensive set of software
solutions which help them grow and engage users, monetize content,
and analyze and optimize business performance to drive more overall
growth. The ironSource platform also empowers telecom operators to
create a richer device experience, incorporating relevant app and
service recommendations to engage users throughout the lifecycle of
the device. By providing a comprehensive business platform for the
core constituents of the app economy, ironSource allows customers
to focus on what they do best, creating great apps and user
experiences, while we enable their business expansion in the app
economy. For more information please visit www.is.com
About Thoma Bravo Advantage
Thoma Bravo Advantage is a blank check company incorporated as a
Cayman Islands exempted company
for the purposes of effecting a merger, share exchange, asset
acquisition, share purchase, reorganization or similar business
combination with one or more businesses or entities. Its Class A
ordinary shares are listed on the New York Stock Exchange (the
"NYSE") under the symbol "TBA." Thoma Bravo Advantage is sponsored
by Thoma Bravo Advantage Sponsor LLC, which was formed by
individuals affiliated with Thoma Bravo, a leading private
equity firm focused on the software and technology-enabled software
services sector. Thoma Bravo Advantage was formed for the purpose
of executing a business combination in the software industry.
Additional Information and Where to Find
It
This press release relates to a proposed transaction between
ironSource and Thoma Bravo Advantage. This press release does not
constitute (i) solicitation of a proxy, consent or authorization
with respect to any securities or in respect of the proposed
transaction or (ii) an offer to sell or exchange, or the
solicitation of an offer to buy or exchange, any security of Thoma
Bravo Advantage, ironSource, or any of their respective affiliates,
nor shall there be any sale of securities in any jurisdiction in
which such offer, sale or exchange would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction.
In connection with the proposed transaction, ironSource intends
to file a registration statement on Form F-4 with the SEC, which
will include a proxy statement of Thoma Bravo Advantage in
connection with Thoma Bravo Advantage's solicitation of proxies for
the vote by Thoma Bravo Advantage's shareholders with respect to
the proposed transaction and a prospectus of ironSource. Thoma
Bravo Advantage also will file other documents regarding the
proposed transaction with the SEC.
This communication does not contain all the information that
should be considered concerning the proposed transaction and is not
intended to form the basis of any investment decision or any other
decision in respect of the proposed transaction. Before making any
voting or investment decision, investors and security holders are
urged to read the registration statement, the proxy
statement/prospectus and all other relevant documents filed or that
will be filed with the SEC in connection with the proposed
transaction as they become available because they will contain
important information about the proposed transaction.
Investors and security holders will be able to obtain free
copies of the registration statement, proxy statement/prospectus
and all other relevant documents filed or that will be filed with
the SEC by ironSource and Thoma Bravo Advantage through the
website maintained by the SEC at www.sec.gov. In addition, the
documents filed by ironSource may be obtained free of
charge from ironSource's website at http://www.is.com or
by written request to ironSource at ironSource Ltd.,
Derech Menachem Begin 121, Tel Aviv-Yafo, Israel, and the documents filed by Thoma Bravo
Advantage may be obtained free of charge from Thoma Bravo
Advantage's website at http://www.thomabravoadvantage.com or by
written request to Thoma Bravo Advantage, 150 N. Riverside Plaza,
Suite 2800, Chicago, Illinois
60606.
Participants in Solicitation
ironSource and Thoma Bravo and their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from Thoma Bravo's shareholders in
connection with the proposed transaction. Additional information
regarding the interests of those persons and other persons who may
be deemed participants in the proposed transaction may be obtained
by reading the proxy statement/prospectus regarding the proposed
transaction. You may obtain free copies of these documents as
described in the preceding paragraph.
Forward-Looking Statements
This communication contains forward-looking statements within
the meaning of the federal securities laws with respect to the
proposed transaction between Thoma Bravo Advantage ("TBA") and
ironSource Ltd. ("ironSource"). All statements other than
statements of historical facts contained in this communication,
including statements regarding ironSource's, TBA's or the combined
company's future financial position, business strategy and plans
and objectives of management for future operations, are
forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "may," "will,"
"should," "expects," "plans," "anticipates," "could," "intends,"
"targets," "projects," "contemplates," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of these
terms or other similar expressions. Forward-looking statements
include, without limitation, ironSource's or TBA's expectations
concerning the outlook for their or the combined company's
business, productivity, plans and goals for future operational
improvements and capital investments, operational performance,
future market conditions or economic performance and developments
in the capital and credit markets and expected future financial
performance, as well as any information concerning possible or
assumed future results of operations of the combined company.
Forward-looking statements also include statements regarding the
expected benefits of the proposed transaction between ironSource
and TBA.
Forward-looking statements involve a number of risks,
uncertainties and assumptions, and actual results or events may
differ materially from those projected or implied in those
statements. Important factors that could cause such differences
include, but are not limited to: (i) the risk that the transaction
may not be completed in a timely manner or at all, which may
adversely affect the price of TBA's securities; (ii) the failure to
satisfy the conditions to the consummation of the proposed
transaction, including the adoption of the merger agreement by the
shareholders of TBA and ironSource, the satisfaction of the minimum
trust account amount following redemptions by TBA's public
shareholders and the receipt of certain governmental and regulatory
approvals; (iii) the lack of a third party valuation in determining
whether to pursue the proposed transaction; (iv) the occurrence of
any event, change or other circumstance that could give rise to the
termination of the merger agreement; (v) the effect of the
announcement or pendency of the transaction on ironSource's
business relationships, performance, and business generally; (vi)
risks that the proposed transaction disrupts current plans of
ironSource and potential difficulties in ironSource employee
retention as a result of the proposed transaction; (vii) the
outcome of any legal proceedings that may be instituted against
ironSource or against TBA related to the merger agreement or the
proposed transaction; (vii) the ability of ironSource to list its
ordinary shares on the New York Stock Exchange; (ix) volatility in
the price of the combined company's securities due to a variety of
factors, including changes in the competitive industry in which
ironSource operates, variations in performance across competitors,
changes in laws and regulations affecting ironSource's business and
changes in the combined capital structure; (x) the ability to
implement business plans, forecasts, and other expectations after
the completion of the proposed transaction, and to identify and
realize additional opportunities; (xi) ironSource's markets are
rapidly evolving and may decline or experience limited growth;
(xii) ironSource's reliance on operating system providers and app
stores to support its platform; (xiii) ironSource's ability to
compete effectively in the markets in which it operates; (xiv)
ironSource's quarterly results of operations may fluctuate for a
variety of reasons; (xv) failure to maintain and enhance the
ironSource brand; (xvi) ironSource's dependence on its ability to
retain and expand its existing customer relationships and attract
new customers; (xvii) ironSource's reliance on its customers that
contribute more than $100,000 of
annual revenue; (xviii) ironSource's ability to successfully and
efficiently manage its current and potential future growth; (xix)
ironSource's dependence upon the continued growth of the app
economy and the increased usage of smartphones, tablets and other
connected devices; (xx) ironSource's dependence upon the success of
the gaming and mobile app ecosystem and the risks generally
associated with the gaming industry; (xxi) ironSource's, and
ironSource's competitors', ability to detect or prevent fraud on
its platforms; (xxii) failure to prevent security breaches or
unauthorized access to ironSource's or its third-party service
providers data; (xxiii) the global scope of ironSource's
operations, which are subject to laws and regulations worldwide,
many of which are unsettled and still developing; (xxiv) the
rapidly changing and increasingly stringent laws, contractual
obligations and industry standards relating to privacy, data
protection, data security and the protection of children; and (xxv)
the effects of health epidemics, including the COVID-19
pandemic.
ironSource and TBA caution you against placing undue reliance on
forward-looking statements, which reflect current beliefs and are
based on information currently available as of the date a
forward-looking statement is made. Forward-looking statements set
forth herein speak only as of the date of this communication.
Neither ironSource nor TBA undertakes any obligation to revise
forward-looking statements to reflect future events, changes in
circumstances, or changes in beliefs. In the event that any
forward-looking statement is updated, no inference should be made
that ironSource or TBA will make additional updates with respect to
that statement, related matters, or any other forward-looking
statements. Any corrections or revisions and other important
assumptions and factors that could cause actual results to differ
materially from forward-looking statements, including discussions
of significant risk factors, may appear, up to the consummation of
the proposed transaction, in TBA's public filings with the SEC or,
upon and following the consummation of the proposed transaction, in
ironSource's public filings with the SEC, which are or will be (as
appropriate) accessible at www.sec.gov, and which you are advised
to consult.
Market, ranking and industry data used throughout this
communication, including statements regarding market size and
technology adoption rates, is based on the good faith estimates of
ironSource's management, which in turn are based upon ironSource's
management's review of internal surveys, independent industry
surveys and publications, including reports by Altman Solon, App
Annie, AppsFlyer, Apptopia, eMarketer, Newzoo, Omdia and
Sensor Tower and other third party research and publicly available
information. These data involve a number of assumptions and
limitations, and you are cautioned not to give undue weight to such
estimates. While ironSource is not aware of any misstatements
regarding the industry data presented herein, its estimates involve
risks and uncertainties and are subject to change based on various
factors, including those discussed above.
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