Video search engine business blinkx is to acquire Burst Media Corporation, the online advertising services and technology business, for an aggregate consideration of US$30 million (£18.5 million) to be satisfied by the issue of New Blinkx Shares and, for Non-Accredited Investors, in cash. The deal is expected to close on May 9, 2011.
The combination of the two companies will bring blinkx’s 35 million hours of online video and TV to Burst’s audience of over 130 million unique users (source: comScore Media Metrix December 2010). blinkx will create contextually relevant video channels for Burst’s network of publishers, thereby aggregating an online video audience for advertisers across long tail internet sites, which will rival the scale of television networks.
Commenting on the Acquisition, Suranga Chandratillake, Chief Executive of blinkx, said: “In just a few years, we have seen online video advertising become the fastest growing segment of online advertising. Up until now, the primary barrier to further television advertising budgets moving online has been online video’s inability to match the sheer scale of audience that television can deliver. We are extremely excited about the Acquisition as it will allow us to overcome that challenge: by fusing blinkx’s unique patented technology and large video index with Burst’s massive reach, we will have the potential to create personalised, online television that is watched by hundreds of millions of users.”
Burst results for the year ended 31 December 2010.
In summary, for the twelve months ended 31 December 2010, Burst has reported revenues of US$37.7 million (2009: US$31.4 million), gross profit of US$15.5 million (2009: US$14.0 million), and adjusted EBITDA loss of US$1.4 million (2009: adjusted EBITDA of US$0.6 million). As at 31 December 2010 gross assets were US$21.0 million and cash and cash equivalents were US$0.4 million (2009: US$5.7 million).
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