Blinkx is to acquire Burst Media Corporation

April 8, 2011 — Fusion DigiNet

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).

UK, Cambridge : USA, San Francisco & Burlington, MA

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UK Buyout market registers strongest quarter in two years

April 8, 2011 — Fusion DigiNet

Data from Lyceum Capital and Cass Business School’s UK Growth Buyout Dashboard shows that 23 smaller private equity buyouts worth an aggregate £828 million* completed between 1 January and 31 March 2011 – the highest volume and value seen in any single quarter during the past two years.

This quarterly trend analysis of private equity transactions in the £10 million to £100 million segment highlights a continuing upward trend and represents a strong start to the year.

The report’s authors say the figures reflect growing confidence and appetite amongst investors to support businesses which, having proven their resilience during the downturn, and are now well placed to harness emerging growth opportunities.

Number of investments

Whilst 11 transactions in the £10-25 million value range make up 48% of all mid-market ativity, the 12 deals completed in the £26-100 million range was a higher volume than has been seen any quarter during the previous two years .

Type of investments

Management buyouts (MBOs) continued to be the most prevalent transaction type in Q1 2011, accounting for 61% of all activity (14 of the 23 deals). However the data also illustrates that there has been a sharp rise in the number of secondary buyouts.

Eight SBOs completed – the highest volume of this type of deal in any quarter over the last two years and accounts for a third of all transations completed in Q1 2011.

The reports authors believe this rise was expected given the increased number of larger deals recorded and that the trend reflects the number of private equity houses continuing to rely on old-style intermediary-based deal sourcing, rather than research-led direct origination.

Only one public-to-private transaction was launched in the quarter, underlining the lack of appetite for de-listings within the mid-market.

This lack of interest is unlikely to improve given the recently announced proposals to change the Takeover Code.

Investments by industry

Technology, media, telecommunications (TMT) businesses attracted the most private equity investment in the quarter, with the seven deals completed in the sector accounting for 30% of all deals in Q1 2011.

This is a sharp rise in activity from previous quarters (Q4 2010: 3, Q3 2010: 2), continuing an underlying trend which saw the annual number of deals involving TMT businesses nearly treble from four in 2009 to 11 in 2010.

The other sector showing increased activity is retail and consumer, in which more deals were transacted (four) than in any other quarter over the past two years.

Trade, IPO and Secondary Exits

The first quarter of 2011 has seen the number of exits from private equity investments remain relatively steady with 11 deals completing in Q1 compared to an average of 10 over the previous four quarters.

Whilst trade dominated the buyer pool throughout 2009 and 2010, the first quarter of 2011 has seen this trend reverse, with the majority of exits (73%) being provided by eight secondary buyouts.

With just four exits through trade buyers, Q1 2011 has seen the lowest level of trade activity registered since Q4 2009.

The reports authors suggest that this trend reflects an increasing number of sponsors returning to market following the downturn looking to quickly deploy capital in mature private-equity backed assets.

Commentary

Commenting on the report, Andrew Aylwin, Partner at Lyceum Capital, said: “Optimism or pressure to invest? Whatever the reason, activity was up again in Q1. If this trend continues, we may see a hundred new deals this year, up from 68 last year and just 35 in 2009.

“But with prices on the rise, managers in the lower mid-market are working hard to understand investment risk, with deal processes drawn-out as a consequence.

“It’s too early to tell whether 2011 will yield a good vintage, but the market is clearly testing investment selection today with value-adding skills in the spotlight next.”

Scot Moeller, Professor in the Practice of Finance at Cass Business School, said: “It is notable that the first quarter’s activity in this lower middle market has been broader based than last year in terms of both industry sectors and size of deal.

“When combined with the consistently higher deal flow since early 2009, this should be a good indicator of continued strong deal flow in the next several quarters although the market is clearly still at a point where participants expect surprises.

“Particular strengths are currently in the technology sector, including software, as businesses gear up with the continuing improved outlook for the economy; these two sectors should continue to see increasing activity in 2011.”

For more information go to the The Cass/Lyceum Capital UK Growth Buyout Dashboard

*All figures for aggregate enterprise value of private equity investments are based on confirmed values from Experian’s CorpFin database and additional estimations by Lyceum Capital and Cass Business School where undisclosed.

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Chime Communications acquires The Icon Group

April 7, 2011 — Fusion DigiNet

Chime Communications has acquired The Icon Group, an experiential marketing business, based in Sidcup in Kent. Icon brings sponsors’ brands to life at stadia and major sporting events around the world, usually on the basis of multi-year contracts. Customers include major sporting federations such as UEFA where Icon has assisted in the physical branding of the UEFA Champions League for the past 7 years. Other customers for whom Icon has worked or is currently working include FIFA; the Ryder Cup; the Boat Race; Abu Dhabi Motor Sports; and LTA Wimbledon.

Chime is to pay an initial consideration of £11 million of which £7.15 million will be through the Vendor Placing and the balance through the issue of the Consideration Shares. The Consideration Shares are subject to orderly marketing restrictions such that no shares can be sold for 12 months following the date of issue and only 50% may be sold in the following 12 months. In addition, two further tranches of deferred consideration may become payable. The first tranche will be calculated as 4.75 times average 2011 and 2012 earnings before interest and tax less the initial consideration and will be payable in 2013. The second tranche will be calculated as 4.75 times average 2013 and 2014 EBIT less both the initial consideration and the first tranche and will be payable in 2015. In both cases, the deferred consideration will be satisfied 50% in loan notes and 50% through the issue of shares in Chime (although Chime retains the right to pay the share consideration through the issue of loan notes). A further payment of £0.6 million will be made to Maidstone shareholders representing surplus cash in Maidstone. Following completion a sum of £0.6 million will be immediately paid to Chime as a dividend. In the event that the Placing does not become unconditional Chime has the right (but not the obligation) to complete the acquisition of Icon and settle in cash that part of the initial consideration which would have been satisfied through the Vendor Placing.

For the year ended 31 December 2010, Icon reported revenue of £18.8 million and EBIT of £1.9 million after one-off items totalling £0.2 million. At 31 December 2010 the gross assets of Icon were £8.6 million. On 7 February 2011 Icon acquired for cash consideration of £1 million the trade and assets of Stanford Logistical Support Limited (‘SLS’), a company which focuses on the events industry for the delivery and implementation of city dressing and event branding. For the year ended 30 November 2010 SLS had revenue of £2.1 million and net profit of £0.2 million.

Chime sees significant growth opportunities for Icon resulting from the Olympic Games in London in 2012 and in Rio in 2016 and in utilising the contacts and relationships with major world sporting federations that Icon will bring to the Sports Marketing division. The experiential marketing activity is also a business which other Chime companies will market to their clients.

UK, London & Sidcup, Kent

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Clicker acquires Hip Hop and Urban News Site dahoodbuzz.com

April 5, 2011 — Fusion DigiNet

Clicker, an Internet brand-building firm focused on developing stand-alone consumer and social networking brands, today announced it has acquired www.dahoodbuzz.com from Backendtechnology.com Inc. for an undisclosed price.

“The property aggregates from the most trusted sources on the web, the latest Hip Hop and Urban news,” said Clickers recently appointed CEO Lloyd Lapidus. “With an automated content updating engine integrated into the site it ensures that the users will always have the most up to date content to consumer.”

“With the acquisition of www.dahoodbuzz.com, Clicker, Inc. continues to stay on the leading edge of bringing the latest content to different segments of the marketplace,” said Lapidus. “It is a user-friendly destination that makes the consumption of this content second to none. The property also has social networking capability as well, making the property an interactive experience for its visitors.”

Lapidus said that with multiple ad spaces spread throughout the site the property represents the potential for generating revenue for the company.

“This is a highly defined and desirable demographic that is sought out by many major national brands,” added Lapidus. “As the site matures it has the potential of becoming an ideal vehicle for those brands to reach this lucrative market.”

USA, Irvine, CA

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Collective acquires UK video network Web TV Enterprise

March 31, 2011 — Fusion DigiNet

Collective, a full service provider of media and technology solutions for display and video advertising, has acquired premium online video advertising network, Web TV Enterprise. The deal, follows Collective’s February acquisition of video advertising platform OggiFinogi. Terms of the deal were not disclosed.

Web TV Enterprise is the UK’s largest premium online video ad network, representing many of the UK’s leading web publishers and content owners. A pioneer of the VOD (video on-demand) advertising space since 2006, Web TV presents advertisers with the widest range of premium video channels on the web, reaching more than 25 million UK viewers a month.

“Slow adoption of online video advertising has resulted in the format’s potential being left largely untapped with video companies remaining a small subset of overall television advertising spend,” said Joe Apprendi, CEO, Collective. “Unlike most video networks, Web TV’s revenues come largely from broadcast media budgets versus smaller digital plans. This is a trend that we see accelerating in the UK, US and globally.”

USA, New York, NY & UK, London

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Collective acquires video ad platform Oggifinogi Posted on February 24, 2011

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RALLY Marketing Group acquiring PassionFruit Games

March 31, 2011 — Fusion DigiNet

RALLY Marketing Group, an integrated marketing and promotions agency, is acquiring PassionFruit Games, a developer of casual video games designed for the female market. PassionFruit Games recently released Tiger Eye Part 1: Curse of the Riddle Box, which has become one of the top-selling, novel-based casual games released to date. Terms of the deal were not disclosed.

“Given the importance of the female shopper to our clients, we’ve built an incredible knowledge base and put great effort into understanding how their behavior is changing,” said RALLY CEO Lisa Clarke. “The acquisition of PassionFruit Games is an example of how RALLY, as an integrated agency, can help our clients capitalize on the evolution of marketing regardless of the platform or media.”

For Melissa Heidrich, Co-founder and Studio Director at PassionFruit Games, finding the right organizational fit was key. “There are many reasons on paper why this union makes sense,” she added. “However my decision is validated daily when we come in, sit in the same offices as one company, and work together to move this exciting new partnership forward.”

USA, Seattle, WA

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Lansons takes a 25% stake in social media agency cubaka

March 31, 2011 — Fusion DigiNet

Lansons Communications has bought a 25 per cent stake in a social media agency cubaka. The agency was founded in 2009 by Simon Rutherford, former Toyota head of digital. Terms of the deal were not disclosed.

As part of the deal Tony Langham, Lansons chief executive, will join the cubaka board. The agency will relocate to Lansons offices but maintain its independent branding.

Langham explained: ‘All of our campaigns include social media, but there are also social media only briefs and we weren’t in the market to win those and neither are most of the other top 25 PR agencies under their own identities.’

He added that the investment allows the agency to attract a higher quality of social media strategist than creating a social media function in-house.

Rutherford said the tie-up would ‘offer clients the chance to plan effective social media strategy, web development, community management and crisis comms management together so that they work cohesively.’

Cubaka will continue to service its own clients as well as offer specialist digital consulting to Lansons’ clients and help drive new business.

Clients at the six-strong agency include Toyota, Lexus and Davina Peace.

The news comes four months after Lansons bought public affairs consultancy Foresight Consulting.

Langham said that the agency remained interested in making another tactical acquisition in the digital space.

Read more on Simon’s Rutherford’s blog

UK, London

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Econsultancy – profits up and membership hits 100,000

March 31, 2011 — Fusion DigiNet

Econsultancy, the community website for digital marketing and e-commerce professionals has reached the major milestone of 100,000 members globally. Earlier this month Meera Shah, Director at Red Apple Delivery became the 100,000th person to sign up.

The membership milestone has been achieved eight years after Econsultancy first launched its paid-for subscription model, and follows on from a period of international expansion to the US, Middle East and Far East.

Econsultancy CEO Ashley Friedlein says: “We’re all thrilled to have surpassed the 100,000-member mark. We’ve always believed in our professional community-focused business model and, in an era where many publishers are scrabbling to find a monetization model that works, it’s exciting to be growing so fast, particularly in the US, Middle East and Far East. We believe the internet is opening up huge opportunities internationally for UK businesses like ours: the growth in elearning and web-delivered professional qualifications alone is immense.”

The business is also growing financially. PaidContent reported today that Econsultancy’s profits for the current year are expected to be up by 50% to £1.5 million and revenues up by around £1 million to close to £6 million.

Read the full story on Econsultancy’s website – here

UK, London

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Meltwater acquires social CRM software business JitterJam for $6M

March 28, 2011 — Fusion DigiNet

Social media and news monitoring company, The Meltwater Group, has acquired Social CRM software company JitterJam. Meltwater purchased JitterJam for $6 million, and all of JitterJam’s employees will join Meltwater.

Meltwater has revenues of around $100 million a year company. The company has 55 offices around the world serving more than 18,000 customers. JitterJam combines email, social media and mobile engagement with an intelligent contact database to provide businesses with an integrated consumer engagement and marketing platform. The JitterJam platform is built for consumer-facing companies who are looking to generate ROI from social, mobile and email engagement and marketing. The JitterJam platform will be integrated over time with the Meltwater Buzz product.

“Meltwater was bootstrapped with $15,000 ten years ago and has now grown to a $100 million leader without external funding in the online media monitoring space. Also, we have proven we have the expertise to achieve rapid success in emerging markets,” said Jorn Lyseggen, chief executive officer and founder of Meltwater Group. “The Social CRM space is clearly experiencing fast growth and within three years we aim to generate $100 million a year in Social CRM solutions alone. The JitterJam technology and talent will help us achieve this goal.”

Meltwater acquired BuzzGain last year and says it intends to acquire more businesses and technologies to help the company further expand its product suite.

USA, San Francisco, CA & Bedford, NH

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Publicis Groupe acquires healthcare advertising agency Watermelon

March 23, 2011 — Fusion DigiNet

Publicis Groupe is acquiring a majority stake in a healthcare advertising agency in Mumbai, India-Watermelon Healthcare Communications Private Limited. On completion of this transaction, this entity will become part of Publicis Healthcare Communications Group (PHCG) and will be renamed Publicis Life Brands Watermelon. This transaction is subject to customary local closing conditions.

As one of the leading healthcare advertising agencies in India, Watermelon is a full-service advertising agency that has built its business around traditional and new media since its inception in 2003. Nearly 40 employees work to deliver strategic planning, digital and branding, creative, medical education, research, public relations, and healthcare professional and consumer communications. Watermelon has worked hard to boost its creative excellence and has received many awards, including 12 awards of excellence at the recent Rx Awards. Watermelon’s clients includes many of the top pharma and biotech companies-AstraZeneca, GlaxoSmithKline, Johnson & Johnson, Merck Specialties, MSD Pharmaceuticals, and Novartis to name a few.

Watermelon’s founders, Abhijit Shitut and Kiran Pai, will be named joint Managing Directors at Publicis Life Brands Watermelon. “We are excited to be part of PHCG and believe this will help us change the landscape of healthcare communications in India” commented Abhijit Shitut and Kiran Pai. “Because PHCG is revered for its excellence in global communications in the healthcare sector, we look forward to working together in leveraging their knowledge and global network in our local market”;

Ash Kuchel, President, PHCG Asia Pacific region (APAC) said, “PHCG is delighted to welcome Watermelon to our network. Watermelon is the right fit and has the expertise to further develop our healthcare communications credentials in new media and best-in-class practices in this important and rapidly emerging market. PHCG will continue to expand its global presence throughout the region in the near future.”

France, Paris & India, Mumbai

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