Press Releases Perion Acquires Hivestack, a Leading Global Full-Stack Digital Out-Of-Home (DOOH) Platform

Perion Acquires Hivestack, a Leading Global Full-Stack Digital Out-Of-Home (DOOH) Platform

Published on

12th Dec 2023

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NEW YORK & TEL AVIV–(BUSINESS WIRE)–Dec. 12, 2023– Perion Network Ltd. (NASDAQ and TASE: PERI), connecting advertisers with consumers through technology across all major digital channels, announced today that it has completed the acquisition of Hivestack Inc., a global innovative full-stack programmatic digital out of home (DOOH) company. The terms of the transaction include US $100 million in cash paid upon closing and a 3-year employee retention and performance-based payment plan of up to US $25 million.

 

DOOH advertising transforms ordinary public spaces into dynamic experiences, engaging audiences with eye-catching, personalized content in real-time. It harnesses cutting-edge technologies to target, deliver and measure unforgettable, immersive ads that connect brands with people on the go. With the acquisition of Hivestack, a programmatic DOOH technology innovator since 2017, Perion is entering an exciting market at its nascent stage, positioning the company to capitalize on its anticipated growth.

 

Hivestack’s platform is used by many of the world’s largest brands, agencies, media owners, and partners including Uber, Colgate, Lego, InterContinental Hotel Group, Doordash, GroupM, dentsu, The Trade Desk, Xandr, Clear Channel, Lamar, Stroër, and many more.

 

“We are excited about the acquisition of Hivestack, which both complements and advances our long-term growth strategy. Hivestack’s DOOH technology platform stands out by offering brands and advertisers what they crave the most: high-visibility creative, precise targeting, immediate impact, wide reach and measurement,” said Tal Jacobson, CEO of Perion. “In addition to advancing our diversification strategy, this transaction aligns with our objective to expand our technological capabilities and product offerings, and we will continue to pursue additional inorganic growth opportunities.”

 

More Regions. More Reach. More Technology

  • Hivestack’s state-of-the-art platform is deployed in 32 countries, spanning North America, EMEA, LATAM and APAC. This global footprint will enable Perion to capitalize on economic trends impacting advertising budgets globally, and offer a variety of solutions in these additional markets.
  • This transaction significantly contributes to Perion’s diversification strategy, enabling it to establish a considerable footprint in the fast-growing DOOH channel, which according to a PQ Media research report, is predicted to increase from US$21.5 billion in 2023 to US$30.7 billion in 2026, reflecting a 15.3% CAGR.
  • Hivestack offers media owners an array of purpose-built software like the DOOH Ad Server, SSP, and Header Bidder, designed to manage, deliver, and optimize targeted advertising on digital screens, enhancing yield and sourcing demand efficiently.
  • For media buyers, Hivestack’s DOOH DSP, along with tools for audience planning and campaign measurement, provides robust capabilities for sourcing optimal inventory and maximizing the effectiveness and ROI of DOOH advertising campaigns.
  • This acquisition is expected to create synergistic opportunities with Perion’s existing advertising offering and business and fits nicely with the company’s retail network strategy.

Mr. Jacobson concluded, “We welcome Hivestack and its impressive team of professionals to Perion. We look forward to capitalizing on the synergies between Hivestack’s technology and Perion’s existing solutions, to provide clients an even more comprehensive, end-to-end offering.”

 

Andreas Soupliotis, Founder and CEO of Hivestack, said, “Joining Perion marks a significant milestone in our journey. The strength of our technology, coupled with Perion’s market expertise and compelling advertiser solutions, will result in new synergetic solutions that resonate with customers on a worldwide scale. We are thrilled about the endless possibilities that this unlocks.”

 

Jefferies LLC acted as financial advisor to Perion.

 

Transaction Terms

Under the terms of the agreement, Perion acquired Hivestack for US$100 million in cash and will pay up to an additional US$25 million (in cash and equity) structured as a three-year employee retention and performance-based payment plan. The performance-based payment plan is tied to EBITDA and contribution ex-TAC annual targets (as defined in the agreement) and will be paid in full if Hivestack generates an aggregate of approximately US$56 million of EBITDA and US$212 million of contribution ex-TAC in aggregate during 2024 through 2026 as shown in the table below. Perion financed the acquisition using cash on its balance sheet.

 

In USD millions

2023E

2024-2026 Aggregate Targets2

3-Year Target CAGR

Revenue

$45

$300+3

43%3

Contribution ex-TAC1

$33

$212

40%

Adjusted EBITDA1

-$3

$56

 

1 Contribution ex-TAC and Adjusted EBITDA of Hivestack are non-GAAP measures. With respect to Hivestack’s 2023 estimated results, we have not provided an outlook for GAAP Income from operations or reconciliation of Adjusted EBITDA guidance to GAAP Income from operations, the closest corresponding GAAP measure, because we do not provide the reconciling items on a consistent basis due to the variability and complexity of these items. Hence, we are unable to quantify these amounts without unreasonable efforts.

 

2 Represent targets that will generate performance-based payments if achieved.

 

3 Estimated revenue target CAGR is based on $300 million.

 

In the past number of years, Hivestack has invested significantly in building its innovative technology infrastructure and expanding its global footprint. This has laid the foundation for strong growth and profitability going forward, enhanced by Perion’s ability to scale and the new synergies formed.

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