TIDMTRMR
RNS Number : 7672Y
Tremor International Ltd
06 January 2020
6 January 2020
Tremor International Ltd
("Tremor" or the "Company")
Acquisition of Unruly
Tremor International Ltd (AIM: TRMR), a global leader in video
advertising technologies, announces that it has reached an
agreement with News Corp ("News Corp" (Nasdaq: NWS, NWSA; ASX: NWS,
NWSLV), a global diversified media and information services
company, to acquire Unruly, News Corp's programmatic video
marketplace (the "Transaction").
The Transaction will be satisfied through the issue of
approximately 6.91 percent. of Tremor International's issued voting
share capital (the "Consideration") to News Corp. Under the terms
of the Transaction, News Corp will be subject to an 18-month lockup
period. Tremor has also entered into a global partnership with News
Corp that will equip Tremor with the exclusive right to sell
outstream video on more than 50 News Corp titles in the UK, US and
Australia. Under the terms of the Transaction, Tremor International
has committed to an ad spend of GBP30 million with News Corp over a
three-year period as part of this agreement.
Unruly is a leading global brand-safe video platform that
leverages a combination of proprietary video marketplace
technologies and data to deliver emotionally engaging content to
consumers.
News Corp has also agreed to contribute cash towards the cost of
integrating Unruly with the Company.
Furthermore, it is anticipated that Rebekah Brooks, Chief
Executive Officer of News UK, will be joining the board as a
non-executive director, representing News Corp, subject to the
completion of the customary directorate appointment due diligence.
In addition, it is anticipated that Norman Johnston, CEO of Unruly,
will be joining Tremor's board in due course, subject to the
approval of Tremor's shareholders and the completion of the
customary directorate appointment due diligence.
The Transaction is directly in-line with the Company's
three-pillared strategy to grow by leveraging video, data and
Connected TV ("CTV"). Specifically, the Board expects the
Transaction to deliver the following strategic benefits:
-- Significantly extends Tremor's international footprint
o Adds an additional 1.2 billion unique monthly users(1) through
premium publisher partnerships across the US, Europe and APAC;
o Opportunity to accelerate the global roll-out of Tremor's
recently acquired RhythmOne assets;
o Enables effective execution in worldwide markets due to
Unruly's integration with over 20 of the world's leading Demand
Side Platforms ("DSP").
-- Bolsters Tremor's supply-side platform
o Gives access to exclusive outstream video placements on more
than 50 News Corp titles worldwide as part of a strategic
partnership deal with News Corp for a minimum of GBP30 million
revenue for News Corp over three years;
o Tremor will benefit from Unruly's exclusive, brand-safe
outstream video inventory and supply, and 2,000 direct publisher
integrations.
-- Expands Tremor's customer base, adding leading Fortune 500 customers
o The acquisition will facilitate the positioning of Tremor as a
global company, leveraging the strong relationships that Unruly has
with their U7 council members of tier 1 brands including P&G,
Unilever, Nestle, American Express and others;
o Unruly currently works with 95 of the top 100 AdAge
Brands.
-- Opportunity to partner with News Corp and leverage Unruly's
highly reputable brands and premium focus
o Unruly is audited and quality assured to the highest
verification standards aligning with its blue-chip clients'
requirements;
o The Unruly brand is 'top tier' and underpins its premium
publisher relationships;
o Advertisers prefer promoting their products and services on
high premium sites which are more effective in shifting brand
metrics: Tremor will be able to leverage these sites.
-- Deepens Tremor's data, pricing and intelligence capabilities
o The Company will also be able to use Unruly's pioneering
testing and targeting solution UnrulyEQ, which uses unique
emotional data to help advertisers engage audiences more
effectively.
-- Expected to be breakeven in this financial year, excluding
integration costs, and to positively contribute to adjusted EBITDA
in the financial year ending 31 December 2021
News Corp advised Tremor that the Transaction is also expected
to be financially beneficial to News Corp.
Trading update
The Company also provides a brief update on current trading for
the year ending 31 December 2019.
The Board is pleased to report that adjusted EBITDA for the
period is expected to be in-line with expectations, supported by a
combination of cost saving initiatives and a general focus on
profitable and strategic activities that will be the core of the
Company going forward. As highlighted during 2019, the Company's
Performance division continues to be impacted by a combination of
regulatory headwinds. This, combined with the Company focusing on
delivering higher margin revenue and its clearly outlined vision of
leveraging Video, Data and CTV, has resulted in management
anticipating that revenue at a group level will be below
expectations for the financial year ending 31 December 2019.
The Company remains highly cash generative, has a very strong
balance sheet and estimates that it ended the financial year (31
December 2019) with c. $75 million of net cash after completing $6
million of buy back payments in H2 2019 (c. $25 million in FY 2019)
and making a $5 million advance payment for the extension of the
exclusive Alphonso partnership for an additional two years. A more
comprehensive trading update covering the full year 2019 figures
will be provided in late January 2020.
Ofer Druker, Chief Executive Officer of Tremor International,
commented:
"This transaction is another important milestone in Tremor's
transformation into a leading video advertising business. We are
delighted to be acquiring a truly world class asset in Unruly, but
equally important is the formation of our new strategic alliance
with News Corp, which will provide Tremor access to globally
recognised media brands, in a partnership we believe to be mutually
beneficial for both companies.
"In addition, not only does this transaction deliver a number of
commercial opportunities for the Company, but it is a significant
endorsement of Tremor as a business, given the reputation of News
Corp globally. I look forward to providing further updates during
2020, as we seek to further expand and enhance our business."
Robert Thomson, Chief Executive of News Corp, said:
"The sale of Unruly marks an important step in our strategy of
simplification at News Corp, while we expect it to yield ongoing
financial benefits. We look forward to partnering with Tremor and
are grateful to Unruly and its truly talented team, who have helped
our businesses in the UK, US and Australia advance their digital
advertising expertise."
Norman Johnston, CEO of Unruly, added:
"Unruly will immediately benefit from Tremor's wide range of
formats, including advanced TV and In-App, as well as an analytics
suite and yield optimisation tools. Together we'll bring the power
of emotions to video advertising to drive better results for
advertisers, higher levels of engagement for consumers and more
revenue for publishers. We are also grateful for the opportunity
for Unruly to continue partnering with News Corp and its businesses
around the world, with whom we have worked so closely and
productively for years. News Corp benefits from the transaction
both financially and by having found a partner to take Unruly
forward and drive digital outstream revenues."
A Q&A document providing more detail regarding the
Transaction is available on the investor section of the Company's
website: https://www.tremorinternational.com/investors/.
For further information please contact
Tremor International Ltd
Ofer Druker, Chief Executive Officer Tel: +972 3 545
Yaniv Carmi, Chief Financial Officer 3900
finnCap Ltd (Nominated Adviser) Tel: +44 (0)20
Corporate Finance - Jonny Franklin-Adams, James 7220 0500
Thompson, Hannah Boros
ECM - Tim Redfern, Richard Chambers
Vigo Communications (Financial Public Relations) Tel: +44 (0)20
Jeremy Garcia 7390 0230
Antonia Pollock
Charlie Neish
tremor@vigocomms.com
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014.
About Tremor International
Tremor International Ltd is a global leader in advertising
technologies, It has three core divisions: Tremor Video (brand
advertising), RhythmOne (media) and Taptica (performance
advertising).
Tremor Video helps advertisers deliver impactful brand stories
across all screens through the power of creative video intelligence
- innovative video technology combined with advanced audience data
and captivating creative. Tremor Video is one of the largest and
most innovative video advertising companies in North America, with
offerings in CTV, in stream, in-app and private marketplaces.
RhythmOne drives real business outcomes in multiscreen
advertising. Its highly ranked programmatic platform efficiently
and effectively delivers performance, quality, and actionable data
to demand and supply-focused clients and partners.
Tremor International Ltd is headquartered in Israel and
maintains offices throughout the US and Canada, Asia-Pacific,
Europe, India and Latin America, and is traded on the London Stock
Exchange (AIM: TRMR).
Further details regarding the Transaction
About News Corp
News Corp (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) is a global,
diversified media and information services company focused on
creating and distributing authoritative and engaging content and
other products and services. The company comprises businesses
across a range of media, including: news and information services,
subscription video services in Australia, book publishing and
digital real estate services. Headquartered in New York, News Corp
operates primarily in the United States, Australia, and the United
Kingdom, and its content and other products and services are
distributed and consumed worldwide. More information is available
at: http://www.newscorp.com
About Unruly
Founded in 2006 and headquartered in London, Unruly is a leading
globally-scaled, brand-safe video business that, leverages a unique
combination of proprietary technology and data. This enables
advertisers to run campaigns with Unruly in the knowledge that
their ads will appear on the most trusted digital publications next
to brand-safe content, and enables publishers to share the same
confidence knowing that Unruly will only run ads from the most
respected global brands on their sites.
Unruly works with 95 of the top 100 AdAge Brands and has over
1.2 billion unique monthly views on its ads. Central to Unruly's
success is the delivery of data-driven creative content in
impactful formats. Unruly's two core products are:
-- UnrulyX - A leading digital video advertising marketplace
connecting blue-chip advertisers and premium publishers
o Delivers advertisers exclusive access to News Corp and other
premium publishers
o Adheres to the highest brand safety protocols
o Incorporates a wide range of video ad formats and integrated
with all major DSPs
-- UnrulyEQ - A proprietary data aggregator and analysis product which powers UnrulyX
o Unique data and insights focused on emotional impact
o Over 10 years of proprietary data
o Data analysis includes over 20,000 consumers surveyed every
moth
o Leveraging data to inform the highest impact creative pieces
and create audience segments
Unruly generated c. GBP43.5 million of revenue in the twelve
months to 30 June 2019 and generated an EBITDA loss of GBP8.8
million*. Tremor expects Unruly to be breakeven in this financial
year, excluding integration costs, and to positively contribute to
adjusted EBITDA in the financial year ending 31 December 2021.
*unaudited
Background to the Transaction
As traditional advertising spend continues to decline as
advertisers seek more sophisticated consumer targeting and
increased return on investment, it is likely that the trend towards
digital, and in particular video, will continue to accelerate.
Central to Tremor's strategy is a clear focus on capitalising on
the high growth video advertising market, which is rapidly becoming
a global marketplace, beyond the US and Europe. Current video
advertising spending in the US alone is expected to grow from $36
billion in 2019 to $58 billion by 2023(2) , and globally, the
market is anticipated to grow to almost $100 billion by 2023(3)
.
The Transaction builds upon the Company's acquisitions of Tremor
Video DSP in August 2017 and RhythmOne in April 2019, both of which
enhanced the Company's exposure to the high growth video
advertising and CTV markets. Specifically, as set out in the
Company's half year results statement published in September 2019,
the Transaction is in line with the Company's aim to expand the
Company's Exchange into international markets beyond the US and
enhances the Company's exposure to both premium publishers and
unique emotive advertising content.
As television, and the way content is being consumed continues
to evolve, so will the economics associated with attracting
advertising revenue. The shift to and growth of Over The Top
("OTT") content providers such as Amazon, Netflix, Hulu and YouTube
through CTV continues to evolve and it is anticipated that video
will continue to be the fastest growing segment within online
advertising and the optimal format for advertisers to communicate
their messages.
Data enables advertisers to better reach the audiences that they
are trying to engage with, and CTV is where most users are
interacting in the new digital age. Tremor already has major assets
in this ecosystem and the addition of Unruly further accelerates
the Company's position in this market, as well as enhancing the
global partnerships within the enlarged group.
Admission of the Consideration Shares
Application has been made to the London Stock Exchange for the
8,525,323 Consideration Shares to be admitted to trading on AIM
("Admission") and it is expected that Admission will become
effective and trading will commence at 8.00 a.m. on 10 January
2020.
News Corp has agreed not to sell any of the Consideration Shares
for a period of 18 months from today.
Following admission of the Consideration Shares, Tremor's issued
share capital consists of 131,978,158 ordinary shares with a
nominal value of NIS0.01 each ("Ordinary Shares"), along with
22,696,078 shares reclassified as dormant shares under the Israeli
Companies Law (without any rights attached thereon), the Company
holds these dormant shares in Treasury. Therefore, the total number
of shares with voting rights is 131,978,158.
The above figure of 131,978,158 Ordinary Shares may be used by
shareholders in the Company as the denominator for the calculations
by which they will determine if they are required to notify their
interest in, or a change in their interest in, the share capital of
the Company under the FCA's Disclosure and Transparency Rules.
Board appointments
It is anticipated that Rebekah Brooks, Chief Executive Officer
of News UK, will be joining the board as a non-executive director,
representing News Corp, subject to the completion of the customary
directorate appointment due diligence. In addition, it is
anticipated that Norman Johnston, Chief Executive Officer of
Unruly, will be joining Tremor's board following the requisite
approvals being received at a general meeting as required by the
Company's articles. Further announcements containing the
disclosures required under the AIM Rules for Companies will be
issued with regards to both appointments once these processes have
been completed.
(1) Source: Comscore
(2) Source: eMarketer, February 2019
(3) Source: Cowen and Company, Jan 10, 2019
This information is provided by RNS, the news service of the
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END
ACQUVOORRKUARUR
(END) Dow Jones Newswires
January 06, 2020 02:01 ET (07:01 GMT)