Adtech firm Tremor International is reportedly in "advanced discussions" with Singtel to acquire digital marketing unit Amobee for approximately US$201 million. If successful, the acquisition is expected to bring in more than US$73 million in additional earnings for Tremor, according to Sky News , doubling the latter's profitability.
Singtel has reportedly brought on board investment bank Moelis a year ago to explore strategic options, Sky News added. Although the specific details of the financing structure that Tremor plans to implement to pay for Amobee were unclear, Sky News said Tremor is reportedly using "little more than a quarter of the US$452 million of cash it has on its balance sheet". Tremor will also reportedly continue with a US$75 million share buyback programme it launched in March even if the Amobee deal goes through, Sky News added.
MARKETING-INTERACTIVE has reached out to Tremor and Singtel for comment.
Singtel placed Amobee under strategic review in May 2021 and an exceptional non-cash impairment charge of US$223 million was made in March this year. In May this year, the telco classifed Amobee as a subsidiary held for sale. During the third quarter and nine months ended 31 December 2021, Amobee witnessed a 19.9% dip in operating revenue to about US$180 million compared to the same period in 2020.
Amobee's operating revenue has fluctuated over the past few quarters. It went from US$108 million in June 2020 to US$186 million in September that same year. Then it rose to US$225 million in December 2020 before dipping to US$130 million in March 2021, according to Singtel's financial statement. For the next quarter in June, Amobee's operating revenue rose to US$169 million. This operating revenue increase for June 2021 also marked a 56.2% jump compared to the same period in 2020. Singtel attributed this growth to increased ad spend and TV demand in contrast to the first quarter in 2020 when clients significantly cut back on ad spend due to the pandemic.
Separately, Tremor recorded Q1 adjusted EBITDA of US$33.6 million in May this year, marking a 22% increase compared to the same period last year. According to the company, contribution excluding targeted amortisation class (TAC) increased organically by 13% during Q1 2022 to US$71.0 million compared to US$63.0 million during the same period last year.
It added that CTV spend grew by 21% during the quarter to US$46.2 million and video revenue continued to represent the overwhelming majority of total contribution excluding TAC at about 80%.
Tremor beefed up its adtech capabilities in 2020 with the acquisition of Unruly. Shortly after, it appointed Alex Khan to group MD, international. According to Khan's LinkedIn, he left the company in March this year. Separately in 2021, Tremor snapped up global CTV video ad server and media management platform, Spearad, for US$14.7 million . Spearad founders Erhard Neumann and Mark Thielen joined the Tremor leadership team following the acquisition.
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