|By Business Wire||
|November 8, 2012 02:02 AM EST||
Perion Network Ltd. (NASDAQ: PERI), today announced the acquisition of SweetIM (a.k.a. “SweetPacks”), an Israeli consumer internet company. SweetPacks produces a variety of free, fun, easy to use and safe apps and downloadable content for everyday use.
“I am very excited about this powerful acquisition that builds off of our great Q3 numbers and accelerates our growth rate. In addition, the acquisition significantly increases our revenues, nearly doubles our profits and expands our profit margins enabling us to exceed $100 million in revenue in 2013,” commented Josef Mandelbaum, Perion’s Chief Executive Officer.
SweetPacks generated $29.7 million in revenues in the 12 month period ending September 30, 2012, with Adjusted EBITDA of $9.0 million, at a 30% margin. This is 89% higher than 2011 revenues of $15.7 million and almost double 2011 Adjusted EBITDA of $4.5 million.
|Trailing Twelve Months “TTM” 9/30/12|
|In millions ($US)||Perion (1)||SweetPacks (2)||Combined|
|Adjusted EBITDA (Margin)||$||10.3 (20||%)||$||9.0 (30||%)||$||19.2 (24||%)|
|Enterprise Value (EV)||$||71.4M||$||40.0M|
(1) Perion revenue and Adjusted EBITDA are on a non-GAAP basis; a detailed reconciliation can be found in table attached.
(2) Based on company preliminary financials.
“This combination provides meaningful scale and adds improved back-end systems that will strengthen our competitive advantage,” added Mr. Mandelbaum. “This acquisition further accelerates our own efforts to scale, adds 22 million new users, creating a larger and more profitable company.”
In consideration for the acquisition, Perion will make an initial payment of $10 million in cash and 1.99 million Perion shares. A second payment of $7.5 million in cash is due 12 months after closing. A third, conditional payment of $7.5 million in cash is due 18 months after closing, subject to certain milestones and achievements, bringing the total potential purchase price, as of close of business November 6, 2012, to $41 million.
“We are able to fund this accretive acquisition using cash on hand and through expected operating cash flow of the acquired entity. While the total share count will now be approximately 12 million shares outstanding, this acquisition significantly increases earnings per share.”
“Lastly, I am thrilled to welcome SweetPacks’ CEO, Nadav Goshen to Perion as its new Chief Operating Officer. His successful industry track record and strong management capabilities are sure to contribute to our future growth.” concluded Mr. Mandelbaum.
Mr. Goshen commented, “I am very excited to join the Perion team. This combination is a unique and powerful opportunity to leverage the successes of both Perion and SweetPacks. I firmly believe in Perion’s vision for the future and am confident that together we can accelerate growth and increase profitability.”
Management expects the acquisition to close within the month, subject to customary closing conditions.
Perion will host a conference call to discuss the acquisition today, November 8th at 10 a.m. EST (5 p.m. Israel Time). To listen to the call please visit the Investor Relations section of Perion’s website at www.perion.com/events-presentations and click on the link provided for the webcast. Interested parties can also dial 1-866-744-5399 to participate in the live call. Callers from Israel may access the call by dialing (03) 918-0685. The webcast will be archived on the company’s website for seven days.
About Perion Network Ltd.,
Perion Network, Ltd. (NASDAQ: PERI) is a global internet consumer software company that develops applications to make the online experience of its users simple, safe and enjoyable. Perion’s two main award winning consumer brands are: IncrediMail and Smilebox. Together these products have had over 150 million downloads. IncrediMail, is a streamlined e-mail and Facebook application with an easy-to-use interface that allows for more personalized communications sold in over 100 countries in 8 languages and Smilebox, a leading photo sharing and social expression product and service that lets customers quickly turn life's moments into digital creations to share and connect with friends and family in a fun and personal way. Perion’s applications are monetized through a freemium model. Free versions of our applications are monetized primarily through our toolbar which generates search revenue, and advertising revenue generated through impressions, while a more advanced feature rich version is available with a premium upgrade. Perion also offers and develops a range of products for mobile phones and tablets to answer its users increasing mobile demands. For more information on Perion please visit www.perion.com.
Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: Valuation adjustment on acquired deferred product revenues, amortization of acquired intangible assets, share-based compensation expenses, acquisition related expenses, deferred finance expenses and non-recurring tax benefits. Adjusted EBIDTA of SweetPacks’ excludes the impact of non-cash and non-recurring stock based compensation, as its value has not yet been determined. As a privately held company SweetPacks had not valued or accounted for, share based compensation effecting its past operations, in accordance with GAAP. Perion also uses Adjusted EBITDA as a non-GAAP financial performance measurement. Adjusted EBITDA is calculated by adding back to net income; Valuation adjustment on acquired deferred product revenues, acquisition related expenses, interest, taxes, stock-based compensation, depreciation and amortization and one-time expenses (credits). The purpose of such adjustments is to give an indication of performance exclusive of non-cash charges and other items that are considered by management to be outside of core operating results. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Business combination accounting rules requires us to recognize a legal performance obligation related to a revenue arrangement of an acquired entity. The amount assigned to that liability should be based on its fair value at the date of acquisition. The non-GAAP adjustment is intended to reflect the full amount of such revenue. We believe this adjustment is useful to investors as a measure of the ongoing performance of our business. We believe these non-GAAP financial measures provide consistent and comparable measures to help investors understand our current and future operating cash flow performance. These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies.
Forward Looking Statements
This press release contains historical information and forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 with respect to the business, financial condition and results of operations of the Company. The words “believe,” “expect,” “intend,” “plan,” “should” and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views, assumptions and expectations of the Company with respect to future events and are subject to risks and uncertainties. In addition, the financial information set forth in this press release is not an indication of the future financial results of the Company following the consummation of the acquisition. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, or financial information, including, among others, risk associated with uncertainty as to whether the transaction will be consummated, the occurrence of any event, change or other circumstances that could give rise to the termination of the acquisition agreement, potential litigation associated with the transaction, risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the proposed transaction and in integrating the acquired business, the distraction of management and the Company resulting from the proposed transaction, changes in the markets in which the Company operates and in general economic and business conditions, loss of key customers and unpredictable sales cycles, competitive pressures, market acceptance of new products, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, whether referenced or not referenced in this press release. Various other risks and uncertainties may affect the Company and its results of operations, as described in reports filed by the Company with the Securities and Exchange Commission from time to time, including its annual report on Form 20-F for the year ended December 31, 2011. The Company does not assume any obligation to update these forward-looking statements.
Source: Perion Network Ltd.
PERION NETWORK LTD.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
U.S. dollars and number of shares in thousands (except per share data), unaudited
|Valuation adjustment on acquired deferred product revenues||1,951|
|GAAP Net income||$||3,133|
|Valuation adjustment on acquired deferred product revenues||1,951|
|Acquisition related expenses||540|
|Share based compensation||1,048|
|Amortization of acquired intangible assets||1,892|
|Deferred finance expenses||76|
|Income tax expense (credit)||1,791|
|Non-recurring tax expense||(379||)|
|Interest expense (income), net||881|
|Depreciation and amortization||(275||)|
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover how hardware commoditization, the ubiquitous nature of connectivity, and the emergence of Big Data a...
May. 30, 2015 04:00 PM EDT Reads: 6,931
Health care systems across the globe are under enormous strain, as facilities reach capacity and costs continue to rise. M2M and the Internet of Things have the potential to transform the industry through connected health solutions that can make care more efficient while reducing costs. In fact, Vodafone's annual M2M Barometer Report forecasts M2M applications rising to 57 percent in health care and life sciences by 2016. Lively is one of Vodafone's health care partners, whose solutions enable older adults to live independent lives while staying connected to loved ones. M2M will continue to gr...
May. 30, 2015 03:45 PM EDT Reads: 2,596
SYS-CON Events announced today that MetraTech, now part of Ericsson, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Ericsson is the driving force behind the Networked Society- a world leader in communications infrastructure, software and services. Some 40% of the world’s mobile traffic runs through networks Ericsson has supplied, serving more than 2.5 billion subscribers.
May. 30, 2015 02:00 PM EDT Reads: 2,617
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In this session, James Kirkland, Red Hat's Chief Architect for the Internet of Things and Intelligent Systems, will describe how to revolutionize your architecture and...
May. 30, 2015 01:00 PM EDT Reads: 1,152
The 4th International Internet of @ThingsExpo, co-located with the 17th International Cloud Expo - to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA - announces that its Call for Papers is open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
May. 30, 2015 12:00 PM EDT Reads: 2,760
The enterprise market will drive IoT device adoption over the next five years. In his session at @ThingsExpo, John Greenough, an analyst at BI Intelligence, division of Business Insider, will analyze how companies will adopt IoT products and the associated cost of adopting those products. John Greenough is the lead analyst covering the Internet of Things for BI Intelligence- Business Insider’s paid research service. Numerous IoT companies have cited his analysis of the IoT. Prior to joining BI Intelligence, he worked analyzing bank technology for Corporate Insight and The Clearing House Pay...
May. 30, 2015 11:45 AM EDT Reads: 1,015
As the Internet of Things unfolds, mobile and wearable devices are blurring the line between physical and digital, integrating ever more closely with our interests, our routines, our daily lives. Contextual computing and smart, sensor-equipped spaces bring the potential to walk through a world that recognizes us and responds accordingly. We become continuous transmitters and receivers of data. In his session at @ThingsExpo, Andrew Bolwell, Director of Innovation for HP's Printing and Personal Systems Group, discussed how key attributes of mobile technology – touch input, sensors, social, and ...
May. 30, 2015 11:30 AM EDT Reads: 4,600
All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo, June 9-11, 2015, at the Javits Center in New York City. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be
May. 30, 2015 11:15 AM EDT Reads: 3,218
SYS-CON Events announced today that BMC will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. BMC delivers software solutions that help IT transform digital enterprises for the ultimate competitive business advantage. BMC has worked with thousands of leading companies to create and deliver powerful IT management services. From mainframe to cloud to mobile, BMC pairs high-speed digital innovation with robust IT industrialization – allowing customers to provide amazing user experiences with optimized IT per...
May. 30, 2015 11:15 AM EDT Reads: 1,942
The world is at a tipping point where the technology, the device and global adoption are converging to such a point that we will see an explosion of a world where smartphone devices not only allow us to talk to each other, but allow for communication between everything – serving as a central hub from which we control our world – MediaTek is at the heart of both driving this and allowing the markets to drive this reality forward themselves. The next wave of consumer gadgets is here – smart, connected, and small. If your ambitions are big, so are ours. In his session at @ThingsExpo, Jack Hu, D...
May. 30, 2015 11:15 AM EDT Reads: 1,467
The multi-trillion economic opportunity around the "Internet of Things" (IoT) is emerging as the hottest topic for investors in 2015. As we connect the physical world with information technology, data from actions, processes and the environment can increase sales, improve efficiencies, automate daily activities and minimize risk. In his session at @ThingsExpo, Ed Maguire, Senior Analyst at CLSA Americas, will describe what is new and different about IoT, explore financial, technological and real-world impact across consumer and business use cases. Why now? Significant corporate and venture...
May. 30, 2015 11:00 AM EDT Reads: 1,173
Today’s enterprise is being driven by disruptive competitive and human capital requirements to provide enterprise application access through not only desktops, but also mobile devices. To retrofit existing programs across all these devices using traditional programming methods is very costly and time consuming – often prohibitively so. In his session at @ThingsExpo, Jesse Shiah, CEO, President, and Co-Founder of AgilePoint Inc., discussed how you can create applications that run on all mobile devices as well as laptops and desktops using a visual drag-and-drop application – and eForms-buildi...
May. 30, 2015 11:00 AM EDT Reads: 5,946
The Internet of Things is not only adding billions of sensors and billions of terabytes to the Internet. It is also forcing a fundamental change in the way we envision Information Technology. For the first time, more data is being created by devices at the edge of the Internet rather than from centralized systems. What does this mean for today's IT professional? In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will addresses this very serious issue of profound change in the industry.
May. 30, 2015 11:00 AM EDT Reads: 1,763
"People are a lot more knowledgeable about APIs now. There are two types of people who work with APIs - IT people who want to use APIs for something internal and the product managers who want to do something outside APIs for people to connect to them," explained Roberto Medrano, Executive Vice President at SOA Software, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
May. 30, 2015 10:30 AM EDT Reads: 4,932
WebRTC defines no default signaling protocol, causing fragmentation between WebRTC silos. SIP and XMPP provide possibilities, but come with considerable complexity and are not designed for use in a web environment. In his session at @ThingsExpo, Matthew Hodgson, technical co-founder of the Matrix.org, discussed how Matrix is a new non-profit Open Source Project that defines both a new HTTP-based standard for VoIP & IM signaling and provides reference implementations.
May. 30, 2015 10:30 AM EDT Reads: 5,737
SYS-CON Events announced today that O'Reilly Media has been named “Media Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York City, NY. O'Reilly Media spreads the knowledge of innovators through its books, online services, magazines, and conferences. Since 1978, O'Reilly Media has been a chronicler and catalyst of cutting-edge development, homing in on the technology trends that really matter and spurring their adoption by amplifying "faint signals" from the alpha geeks who are creating the future. An active participa...
May. 30, 2015 10:30 AM EDT Reads: 1,557
There will be 150 billion connected devices by 2020. New digital businesses have already disrupted value chains across every industry. APIs are at the center of the digital business. You need to understand what assets you have that can be exposed digitally, what their digital value chain is, and how to create an effective business model around that value chain to compete in this economy. No enterprise can be complacent and not engage in the digital economy. Learn how to be the disruptor and not the disruptee.
May. 30, 2015 10:15 AM EDT Reads: 1,281
2015 predictions circa 1970: houses anticipate our needs and adapt, city infrastructure is citizen and situation aware, office buildings identify and preprocess you. Today smart buildings have no such collective conscience, no shared set of fundamental services to identify, predict and synchronize around us. LiveSpace and M2Mi are changing that. LiveSpace Smart Environment devices deliver over the M2Mi IoT Platform real time presence, awareness and intent analytics as a service to local connected devices. In her session at @ThingsExpo, Sarah Cooper, VP Business of Development at M2Mi, will d...
May. 30, 2015 10:00 AM EDT Reads: 1,281
Thanks to widespread Internet adoption and more than 10 billion connected devices around the world, companies became more excited than ever about the Internet of Things in 2014. Add in the hype around Google Glass and the Nest Thermostat, and nearly every business, including those from traditionally low-tech industries, wanted in. But despite the buzz, some very real business questions emerged – mainly, not if a device can be connected, or even when, but why? Why does connecting to the cloud create greater value for the user? Why do connected features improve the overall experience? And why do...
May. 30, 2015 09:45 AM EDT Reads: 1,390
Almost everyone sees the potential of Internet of Things but how can businesses truly unlock that potential. The key will be in the ability to discover business insight in the midst of an ocean of Big Data generated from billions of embedded devices via Systems of Discover. Businesses will also need to ensure that they can sustain that insight by leveraging the cloud for global reach, scale and elasticity.
May. 30, 2015 09:30 AM EDT Reads: 7,410