PERION NETWORK LTD.
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Report Link: Updated Research Report (Dated 11/08/2019)
Analyst: John Nobile
Taglich Rating: Speculative Buy
Price Target: $7.00
Time Horizon: 12 Months
Rating Established: August 13, 2018
Price When Established: $1.05
Most Recent Report: November 8, 2019
Price When Issued: $5.18
Perion Acquires Content IQ
On January 14, 2020, Perion Network Ltd. (NASDAQ: PERI) announced it consummated the acquisition of Content IQ (CIQ), a privately held company based in New York City with offices in Tel Aviv. CIQ has created proprietary data algorithms and analytic tools which deconstruct content, revenue and distribution to help solve digital publishing challenges.
Under the terms of the agreement, Perion acquired all the shares of CIQ for a total consideration of $73.05 million, of which $15 million in cash was paid upon closing, with an additional maximum $11 million being paid as a retention incentive. As part of the total consideration, there is a maximum of $47.05 million in earn-outs over a period of two years if CIQ generates $158 million in revenues and more than $17 million of EBITDA over the next two years.
Doron Gerstel, Perion’s CEO, commented, "As brands find it increasingly difficult to effectively tell their story to consumers, and branded content becomes a more critical and effective form of engagement, a new paradigm is required. Brands must gain the ability to scale to highly relevant audiences, and through that to assert greater control over the media environment. CIQ's offering fills this gap and provides Perion with a proprietary solution that gives publishers and brands the tools they need to prosper in a challenging digital world."
The acquisition of CIQ also prepares Perion for a ‘cookie-less’ environment as regulations reshape the digital advertising ecosystem. Without cookies, publishers will have to find new ways to measure and track user engagement, thus increasing the value of content and contextual advertising. Gerstel said the acquisition of CIQ positions Perion to effectively address these evolving needs of brands, through the addition of industry-defining ‘pub-tech capabilities’, which use AI and machine learning to optimize content and page-level reader engagement.
CIQ’s revenues and adjusted EBITDA for the first nine months of 2019 was approximately $26 million and $4 million, respectively. CIQ’s revenues, GAAP net income and adjusted EBITDA for full-year 2019 are expected to be approximately $39 million, $5.5 million, and $5.9 million, respectively.
Perion will relocate the CIQ New York operations into its New York offices.
Perion Expects 2019 Adjusted EBITDA to Reach at Least $30 Million
On January 6, 2020, Perion Network Ltd. (NASDAQ: PERI) announced that it expects to report adjusted EBITDA for 2019 to reach at least $30 million, exceeding previous guidance of $25 to $27 million. This is the result of higher revenues than internally expected.
Taglich Brothers projected adjusted EBITDA of approximately $27.4 million.
Perion Network Ltd. (PERI) Announces Undertone and TVadSync Join Forces
On December 9, 2019, Perion Network Ltd. (NASDAQ: PERI) announced that its Undertone division and TV data and analytics company TVadSync will be partnering together.
Through this partnership, brands will be able to combine custom and one-to-one quality automated content recognition TV viewership data with Undertone's reach enabling brands to engage TV viewers through their entire digital journeys.
This partnership enables user-level TV data from 18 million households to trigger addressable ads on second-screen devices in real time.
Perion Network Ltd., headquartered in Holon, Israel, is a global provider of online advertising and search technology to brands and publishers. The company provides data-driven execution, from high impact ad formats to branded search and a unified social and mobile programmatic platform.
Please view our current disclosure and disclaimer on our most recent research report.