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Alliance News


Taptica Buys Stake In Japan-Based Adinnovation For USD5.7 Million

Mon, 17th Jul 2017 12:41


LONDON (Alliance News) - Mobile phone advertising firm Taptica International Ltd announced on Monday it has bought a majority stake in Japan-based advertising company Adinnovation Inc for up to USD5.7 million.

AIM-listed Taptica will pay up to USD5.7 million for a 57% stake in Adinnovation with about USD4.3 million payable immediately when the deal closes, which is expected to take place in August, and the remaining GBP1.4 million is due after 12 months based on Adinnovation meeting targets.

Taptica has a call option to buy the remaining 43% share capital of Adinnovation for a price of eight times net profit for a period of six months commencing three years after the acquisition closes.

Thereafter, Adinnovation will have a put option for three months to sell at a price of seven times net profit.

Following the closing of the acquisition, Adinnovation is expected to contribute more than USD5.0 million to Taptica's revenue for 2017 and USD500,000 to its adjusted earnings before interest, tax, depreciation and amortisation on a consolidated basis.

Taptica said the acquisition is part of its strategy to increase its presence in the Asia-Pacific and the company anticipates Japan will be the "next key growth market" for mobile phone advertising due its developed mobile network.

Adinnovation specialises in mobile application and mobile advertising marketing promotions and has recently started to expand into China, Southeast Asia and other markets.

The acquisition follows Taptica and Adinnovation's partnership agreement signed earlier this year.

"We are delighted to welcome Adinnovation into the Taptica family. The two companies have been working closely together over the past year, generating revenues and profits together," Taptica Chief Executive Hagai Tal said.

"The acquisition is expected to be accretive and earnings enhancing from day one and we also expect to benefit from a number of strategic synergies and mitigate the costs and risks we would have incurred to penetrate a market such as Japan organically."

Shares in Taptica were up 4.1% to 380.00 pence on Monday.

By Maryam Cockar; maryamcockar@alliancenews.com; @MaryamCockar

Copyright 2017 Alliance News Limited. All Rights Reserved.

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