Mark Grether (Executive Chairman of Sizmek since June 2017 and Xaxis co-founder) and Randy Wootton (CEO of Rocket Fuel) have announced that Sizmek will purhcase Rocket Fuel.
Still subject to the satisfaction of certain closing conditions, the deal is expected to close within the third quarter of 2017. Customaruy conditions include majority of the outstanding shares of Rocket Fuel’s common stock having been tendered in the tender offer and clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Under the terms of the merger agreement with Sizmek, which has been unanimously approved by Rocket Fuel’s board of directors, an affiliate of Sizmek will commence a tender offer for all of the outstanding shares of Rocket Fuel’s common stock for $2.60 per share in cash. This represents an enterprise value for Rocket Fuel of approximately $145 million.
Still, under the terms of the merger agreement, Rocket Fuel has a go-shop right to solicit third party alternative acquisition proposals for the next 30 days.
Sizmek is backed by Vector Capital, a well-respected technology-centric private equity fund with over $3.4Bn under management. Together with Sizmek and Vector, Rocket Fuel will have the financial backing to accelerate their growth .
20,000 advertisers and 3,600 agencies connected to audiences in 70 countries after merger
Sizmek claims to be the world’s largest people-based creative optimization and data activation platform, and the world’s largest third-party omni-channel ad server. The company has offices in North America, Europe, Middel East, Africa, Asia Pacific region and Latin America.
Rocket Fuel currently operates in North America, Europe and Australia.
Combined, the two companies connect more than 20,000 advertisers and 3,600 agencies to audiences in over 70 countries around the globe, and service a client base comprised of an overwhelming majority of the world’s most recognized brands and agencies. The congloemrate is serving over 2.3 trillion impressions each year.
Next step in programmatic evolution
The proposed combination with Sizmek brings Rocket Fuel’s media optimization and industry leading AI-enabled decisioning to Sizmek’s omni-channel creative optimization and data activation platform.
For Sizmek the purchase of Rocket Fuel means the next logical step in marketing automation, which is media optimization and full creative optimization combined, bringing together the consumer, the context and the creative.
The result of this combination, explains Grether, is an advertising that is deeply personalized, highly intuitive, and AI-enabled for peak performance, redefining the boundaries of creative possibility and media execution.
Rocket Fuel not audited preliminary results for 2ndQ 2017 show $4mill EBITDA loss
Rocket Fuel expects second quarter 2017 Spend to decline approximately 20% year over year to $95 million to $96 million. Net Revenue for the second quarter of 2017 is expected to decline approximately 36% year over year to $42 million to $43 million. Rocket Fuel’s Platform Solutions business grew approximately 77% compared to the prior year quarter, and the Media Services business declined approximately 41% compared with the prior year quarter. Company Media Margin declined approximately 11% from the prior year quarter. These factors contributed to an estimated Adjusted EBITDA loss of approximately $3 million to $4 million for the second quarter of 2017, compared with a $4.2 million Adjusted EBITDA profit in the second quarter of 2016. Rocket Fuel expects its ending second quarter cash position will be roughly flat with the first quarter of 2017 at $62 million to $63 million, and total debt and capital lease obligations will be approximately $83 million to $84 million.
Image over the headline.- © Sizmek and © Rocket Fuel respectively.
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