Du er på: newsweb.no
Fra dato
Til dato
Velg marked
Vis kun aktive utstedere Info...
MeldingsID: 356178
Dato/tid 24.06.2014 16:30
Utsteder Otello Corporation ASA
Marked OB
Informasjonspliktig   Informasjonspliktige opplysninger   Lagringspliktig melding
Global leading mobile video ad platform

Strengthens Opera as global leader in mobile advertising, with a
combined audience reach north of 700 million consumers

Acquisition price of $75 million plus Multi-year Earn-Out

Opera Raises 2014 Guidance and 2015 Financial Aspirations
Oslo, Norway

June 24, 2014

Opera today announced that it has reached a definitive agreement to
acquire AdColony, a rapidly growing and leading mobile video advertising
platform, for $75 million in cash, plus potential earn-out payments of
up to $275 million tied to ambitious 2014, 2015 and 2016 AdColony mobile
video ad platform revenue and Adjusted EBITDA* targets. The acquisition
is expected to close in 3Q 2014.

"Opera is growing rapidly and we are constantly looking for
opportunities to bring best-of-breed services to the market. AdColony is
a natural fit for Opera and our mobile advertising subsidiary, Opera
Mediaworks. This acquisition will augment our services with a robust
specialization around mobile video - the fastest growing segment within
the mobile advertising industry," said Lars Boilesen, CEO, Opera

AdColony excels in delivering innovative, TV-like crystal-clear video
ads instantly in HD across the most popular iOS and Android smartphone
and tablet apps in the world. The video ads can be shown "anywhere" as
part of a native app experience, not just as part of other video
content. AdColony's proprietary Instant-PlayT video ad technology
eliminates latency and long load times for video, providing the highest
quality video experience for advertisers, publishers and consumers, with
interactive elements to drive engagement, action and results. The
company's customers include Fortune 500 brands, performance advertisers
and more than 70 percent of the world's top grossing app publishers.

"The market opportunity for mobile video advertising is significant and
AdColony brings a highly differentiated solution to Opera. After a
comprehensive evaluation of the market, we believe that AdColony is the
clear industry-leading mobile video advertising platform", said Opera's
CFO/CSO Erik Harrell. "This acquisition is expected to be immediately
accretive. As a result of this transaction and incorporating additional
investments we plan to make in our consumer and operator business areas
during the second half of 2014, we are raising our 2014 full year
revenue guidance range to $435 - $460 million and full year Adjusted
EBITDA* guidance range to $110 - $120 million, assuming a closing of the
transaction by August 15. We are also raising our 2015 financial
aspirations to $670 million in revenue and $180 million in Adjusted

"AdColony's team, technology and execution will elevate Opera
Mediaworks' already strong position in the mobile advertising industry.
The combination will deliver an even better results-oriented, end-to-end
offering to brands, agencies and publishers globally," said Mahi de
Silva, CEO, Opera Mediaworks.

AdColony will continue to support its existing customers as usual
following the acquisition. Will Kassoy will continue to lead AdColony as
CEO, and he will additionally take on the role of Chief Marketing
Officer of Opera Mediaworks.

"Opera Mediaworks shares our vision to enhance the mobile ecosystem and
deliver the highest quality mobile video experience in the world," said
Will Kassoy, CEO, AdColony. "AdColony's keen focus on the consumer
experience in mobile apps combined with the massive growth of mobile
video consumption worldwide, has catapulted our growth and made us a go
-to partner for app developers and advertisers. We are excited to now be
part of Opera Mediaworks' renowned global organization and look forward
to unlocking tremendous synergies together."

For advertisers, the addition of AdColony will make Opera Mediaworks the
most comprehensive suite of brand and performance-based mobile ad
solutions, delivering creative, targeting, analytics, measurement,
programmatic buying, and video and rich-media offerings.

For publishers, the combination will offer the world's largest mobile
-focused ad server along with a larger scope of managed, self-service
and programmatic tools creating powerful ways to monetize their
inventory effectively.

Mobile video advertising is the fastest-growing advertising segment in
all of digital advertising. Mobile advertising spend is expected to grow
to $41.9 billion by 2017, with mobile video advertising showing the
highest growth rate, according to
Gartner (http://www.gartner.com/newsroom/id/2653121), a leading
information technology research and advisory firm.

Updated Financial Outlook

  · Opera is updating its 2014 guidance ranges as a result of this
acquisition as follows, assuming closing occurs no later than August 15,
    · o   $435-460 million in revenue, up from $390-$410 million,
incorporating $45-50 million of revenue expected from AdColony
    · o   Adjusted EBITDA* of $110-$120 million, up from $108-$116
million, incorporating $7-9 million of Adjusted EBITDA* expected from
AdColony less $5 million of additional marketing and research and
development investment Opera intends to make in its consumer and
operator business areas during the last 6 months of 2014.

  · Opera is raising its financial aspirations for 2015 to $670 million
in revenue and $180 million in Adjusted EBITDA*, up from $500 million
and $150 million, respectively, as communicated at the Opera Capital
Markets Day in March 2013.

Transaction and Financial Highlights

  · Opera will pay $75 million in cash for AdColony, plus excess cash on
AdColony's balance sheet.

  · In addition, the deal may include additional variable cash and/or
stock consideration of up to $275 million tied to ambitious 2014, 2015
and 2016 AdColony mobile video advertising revenue and Adjusted EBITDA*
targets. The first $30 million of the potential 2014 variable earn-out
consideration will be paid in stock (converted to a number of shares
based on a pre-determined Opera share price of $12.323), equivalent to
up to 2.43 million shares. Beyond this, the payment mix of cash versus
stock for earn-out payments is largely at Opera's discretion, and
payments in stock will be converted based on Opera's share price at the
time of payment.

  · Based on AdColony delivering the incremental revenue and Adjusted
EBITDA* incorporated into Opera's updated 2014 financial guidance and
2015 financial aspirations, Opera estimates about $170 million of the
maximum $275 million of potential earn-out payments would be made,
implying an estimated total purchase price for AdColony of approximately
$245 million.

  · The highlights of the variable acquisition consideration portion of
the transaction for the 2014, 2015 and 2016 financial targets are as

|Performance|Total Maximum   |Expected additional payments, resulting in
|components |Variable        |estimated $245 million purchase price for
|           |Consideration   |AdColony
|Escrow     |                |$25 million
|           |  · Up to $10   |
|           |million released|
|           |based on        |
|           |2014 Revenue and|
|           |Adjusted EBITDA*|
|           |targets         |
|           |  · Up to $15   |
|           |million released|
|           |based on        |
|           |2015 Revenue and|
|           |Adjusted EBITDA*|
|           |targets         |
|2014       |                |$50 million
|Revenue and|  · Up to $22.5 |
|Adjusted   |million based on|
|EBITDA*    |revenue         |
|           |targets         |
|           |  · Up to $52.5 |
|           |million based on|
|           |Adjusted EBITDA*|
|           |targets         |
|2015       |                |$75 million
|Revenue and|  · Up to $30   |
|Adjusted   |million based on|
|EBITDA*    |revenue         |
|           |targets         |
|           |  · Up to $105  |
|           |million based on|
|           |Adjusted        |
|           |EBITDA* targets |
|2016       |                |$20 million
|Revenue and|  · Up to $7.5  |
|Adjusted   |million based on|
|EBITDA*    |revenue         |
|           |targets         |
|           |  · Up to $32.5 |
|           |million based on|
|           |Adjusted EBITDA*|
|           |targets         |
|Total      |$275 million    |$170 million
|variable   |                |
|components |                |

  · Should AdColony deliver even stronger incremental financial
performance compared to what is incorporated into Opera's updated 2014
financial guidance and 2015 financial aspirations and Opera is required
to pay higher earn-out payments, the multiples and attractiveness of the
deal will improve even further.

  · ABG Sundal Collier Norge ASA provided the Opera Board of Directors
with a fairness opinion on the purchase price for AdColony.

  · Opera was advised by Weil, Gotshal & Manges LLP as U.S. counsel and
Arntzen de Besche Advokatfirma AS as Norwegian counsel.

  · Opera has signed an agreement with DNB Bank ASA to increase the size
of its secured revolving credit facility ("facility") from $100 million
to $200 million. The $100 million facility was signed and announced on
February 15, 2013. The new facility will primarily be secured through a
share pledge in Opera Software International AS and floating charges
over accounts receivable in Opera Software ASA and certain of its U.K.
and U.S. subsidiaries. The new facility has a term of 3 years and bears
an interest rate of LIBOR + 1.75% p.a. (plus a utilization fee varying
with the amount drawn) for a facility of $150 million and LIBOR + 2.25%
p.a. (plus a utilization fee varying with the amount drawn) for a
facility of $200 million. On the undrawn portion of the facility, a
commitment fee of 35% of the applicable margin will be paid. Opera
Software intends to use the financing for general corporate purposes and
to fund the acquisition of AdColony.

Information as required by the Oslo Børs Continuing Obligations section

Parties to the agreement: AdColony's primary shareholder is Insight
Venture Capital, a venture capital fund based in New York City.
Management and other employees, including AdColony's CEO, Will Kassoy,
hold options representing approximately 18% of the company. The rest of
the share capital is held by AdColony's founder, Jon Zweig, and early
angel investors. Up to $15 million of the total pool of Adjusted EBITDA*
performance based payments for 2015 and 2016 will be allocated to
employees directly, capped at $7.5 million in each year. This is in
addition to what they stand to gain as option holders. This additional
incentive scheme is included in the communicated variable consideration
range and maximum deal size.

Type of transaction: The transaction is an acquisition by Opera Software
ASA of all outstanding stock in AdColony. The transaction is structured
as a reverse triangular merger resulting in the company, which will be
the surviving corporation, becoming a wholly-owned subsidiary of Opera
Software ASA.

Expected closing: The acquisition is expected to close in the third
quarter of 2014, subject to customary closing conditions, including
receipt of regulatory approvals. During the period between signing and
closing, AdColony will continue operating in the ordinary course,
subject to certain customary operating covenants as specified in the
Purchase Agreement.

Consideration payable and financing: Initial consideration of $75
million in cash, plus excess cash on AdColony's balance sheet. Reference
is also made to the information regarding the increase of the DNB Bank
facility as described above.

Special terms and conditions: As described above, the variable deal
payments (up to $275 million) include different components, such as
escrow with both revenue and Adjusted EBITDA* minimum targets, revenue
based earn-out payments (with associated minimum Adjusted EBITDA*
targets) and pure Adjusted EBITDA* based earn-out payments. The earn-out
period runs through August 2016, with final payments in Q4 2016.

Description of the business to be acquired: AdColony is a mobile video
advertising company based in Los Angeles (CA), with offices in San
Francisco, Seattle, Chicago, Detroit, New York and London. The company
was founded in 2008 as a mobile app developer, and did a strategic pivot
to mobile advertising and video in particular in 2011. AdColony
currently has approximately 100 employees. A majority of AdColony's
revenue currently comes from the U.S., with the balance coming from
Europe and Asia

The current members of the Board of Directors of AdColony are: William
Kassoy, Ryan Hinkle, Bryan Gartner, Octavio Herrera and Jon Zweig.

The senior executives of AdColony are: William Kassoy (CEO), Michael
Owen (CRO), Ty Heath (CTO), David Kurtz (CPO), Brian Kesterson (SVP
Finance & Administration), Bryan Buskas (SVP Sales - Performance
Advertising), Nikao Yang (SVP Marketing & Business Development), David
Pokress (SVP Monetization and Publisher Relations), Greg Deutsch (SVP
Legal and General Counsel) and Molly Moriarty (VP Marketing).

The following table summarizes the key financials of AdColony (2013 and
2012 are audited, 2011 is unaudited, US GAAP):

|                 |FY 2013 |FY 2012 |FY 2011 |
|Revenues         |$52.8 mm|$11.3 mm|$2.4 mm |
|Adjusted EBITDA* |$7.9 mm |$-2.0 mm|$-2.4 mm|
|Total assets     |$30.4 mm|$7.2 mm |$2.4 mm |
|Total liabilities|$20.0 mm|$3.5 mm |$0.8 mm |
|Equity           |$10.4 mm|$3.7 mm |$1.6 mm |

Significance of the transaction for Opera: As shown above, the AdColony
acquisition implies a meaningful uplift in our guidance and aspirations,
and AdColony is expected to become a material part of Opera's mobile
advertising business going forward. Given the substantial synergy
potential, the acquisition contemplates close collaboration across all
business areas and full integration of AdColony's Brand Ad Sales into
the rest of Opera's advertising business, Opera Mediaworks, which is
planned to be executed over the coming 6-12 months.

The mobile advertising market, including Opera's existing customers,
have shown a strong appetite for high quality mobile video advertising
solutions -- on both the supply and demand sides of the advertising
economy. Integrating AdColony's technology into Opera's end-to-end
mobile advertising platform will extend Opera's leadership position in
rich media advertising, establishing it as the go-to platform for mobile
video advertising. AdColony's demonstrated expertise in leveraging
mobile video advertising for performance advertisers is expected to
further strengthen Opera's value proposition for user acquisition/app
install offerings, in a market that is characterized by explosive
growth. AdColony also brings a formidable portfolio of mobile publishers
to Opera, including many of the top grossing mobile applications on
iTunes and Google Play - who in turn can benefit form the broader
capabilities of Opera Mediaworks. Finally, leveraging Opera's global
footprint and accessible inventory, the AdColony technology can be
applied to a much broader global audience, at a much faster rate than
possible in a stand-alone scenario.

Agreements with senior employees or members of the board: Apart from
being entitled to consideration and limited third-party benefits under
the Merger Agreement and taking part in the variable contingent
consideration, including the consideration that will be directed
directly to employees, and except for entering into employment contracts
in the ordinary course, no member of AdColony management or the AdColony
board of directors has been or is expected to be party to any agreements
providing for any specific benefits in connection with the transaction
except for the following pre-existing agreements between AdColony and
certain employees: In addition to his equity interest, Will Kassoy will
receive cash payments as a result of the transaction which will result
in him receiving a minimum percentage of the transaction consideration,
and three other members of senior management will receive cash bonuses
as a result of the transaction.  All such cash amounts arise from
existing arrangements between AdColony and the individuals and will be
deducted from the proceeds payable to AdColony's other equity holders.
No current member of the Opera senior management or Board of Directors
has been or is expected to be party to any arrangements providing for
any specific benefits in connection with the transaction.

This Press Release contains forward-looking statements. These statements
include, among other things, statements regarding future operations and
business strategies and future financial condition and prospects. These
forward-looking statements are subject to certain risks and
uncertainties that could cause our actual results to differ materially
from those reflected in the forward-looking statements. Factors that
could cause or contribute to such differences are covered in the Opera
Software FY 2013 Annual Report under the heading "Risk Factors." We
undertake no obligation to revise or publicly release the results of any
revision to these forward-looking statements, except as required by law.
Given these risks and uncertainties, readers are cautioned not to place
undue reliance on such forward-looking statements.

*"Adjusted EBITDA*", or Non-IFRS EBITDA* (for Opera) or non-USGAAP
EBITDA* (for AdColony), refers to EBITDA* excluding stock-based
compensation expenses, extraordinary/one-time costs and acquisition
related costs.

Conference Call Information

Opera will host a 30-minute conference call to discuss the acquisition
at 8:30 am PST / 5:30 pm CET today. The dial-in numbers for the call

Norway: +47 2195 3231

UK +44 (0) 20 8150 0793

Int'l Toll:  719-386-0001

US/CAN Toll free: 866-564-7442

Participant Passcode: 290583

A replay of this conference call will be available at the Opera Investor
Relations website at http://www.operasoftware.com/company/investors.
Opera uses the website as a means of disclosing material non-public

Following the call, a replay will be available at the same website.

About Opera Software

Opera enables more than 350 million internet consumers worldwide to
connect with the content and services that matter most to them and more
than 130 mobile operators to deliver the very best possible internet
experience to their subscriber base.  Opera also helps publishers
monetize their content through advertising and advertisers reach the
audiences that build value for their businesses, capitalizing on a
global consumer audience reach that exceeds 500 million.

Opera and Opera Mediaworks are trademarks of Opera Software ASA. All
other trademarks are the property of their respective owners.

About Opera Mediaworks

Opera Mediaworks is the world's largest mobile advertising platform,
deployed by 18 of the world's top 25 media companies and servicing 23 of
the world's top 25 brands. With a focus on technological innovation,
transparency and trust, Opera Mediaworks enables advertisers to reach
their target audiences and publishers optimize ad monetization. Opera
Mediaworks' mission is to deliver relevant ads to the right people at
the right time across today's most important medium-mobile.

Headquartered in Silicon Valley, California, Opera Mediaworks has
additional offices in San Francisco, New York, Los Angeles, Chicago,
Miami, London, Hamburg, Buenos Aires, Sao Paulo, Mexico City, Bogota,
San Jose (Costa Rica), Santiago, Dublin, Oslo, Moscow, Singapore,
Jakarta and New Delhi. Opera Mediaworks is a wholly-owned subsidiary of
Opera Software ASA, which is listed on the Oslo Stock Exchange under the
ticker symbol OPERA. Learn more about Opera Mediaworks
at www.operamediaworks.com.

About AdColony

AdColony is a mobile video advertising company whose proprietary Instant
-PlayT technology serves razor sharp, full-screen video ads instantly in
HD across its extensive network of iOS and Android apps, eliminating the
biggest pain points in mobile video advertising: long load times and
grainy, choppy video. As a leading mobile video advertising and
monetization platform, AdColony works with both Fortune 500 brands and
the world's top grossing publishers. The company's reach, targeting and
optimization tools and services provide advertisers with a superior way
to engage mobile audiences at scale. AdColony's app developer tools and
services provide publishing partners with ways to maximize monetization
while gaining insight needed to continuously optimize content and
advertising offerings. AdColony is a privately held company backed by
Insight Venture Partners and has offices in Los Angeles, San Francisco,
Seattle, Chicago, Detroit, New York and London. To learn more about
AdColony, visit www.AdColony.com.

Les om ansvar og rettigheter.