Gravity4 will double its SEK 282 million (£21.6 million) bid for performance marketing network Tradedoubler with the hope of securing a full buyout.
Last Friday PerformanceIN reported that interest from Gravity4, a San Francisco-based ad tech group, had caused Tradedoubler’s outstanding stocks to go offline. However, it was not known just how much of the business was being offered.
Gravity4 has now confirmed that it is looking to acquire the whole company through a ‘merger agreement’, and for a revised fee of SEK 565 million (£43.4 million).
It’s believed half of the new sum will be paid in cash, with the remainder coming from stock in Gravity4. Details shared exclusively with PerformanceIN show that Tradedoubler employees “necessary to continue the success of the business” will be retained.
Gravity4 ups bid
A document referencing Gravity4 CEO Gurbaksh Chahal confirms the aforementioned sum being used to acquire “100% of the company”, in a tax efficient manager but with “no financing contingency”.
Dated May 14, a day before rumours first mounted over a takeover, it is unknown whether the document is an edited version of the original term sheet.
An offering of SEK 282 million in cash should not be out of reach of Gravity4, which says it is on target for $100 million in global revenue for 2015.
The bid is being offered on the condition that Tradedoubler maintains certain aspects of its current position, including cash and debt, and assumes a “normalized” target for net working capital. This includes the value of current assets such as inventory, and less current liabilities such as taxes and deferred revenue.
Gravity4 is proposing that 10% of its purchase price be held back for a period of 18 months following the deal’s closing, to be recovered in the event of a breach in the merger agreement.
Tradedoubler informed PerformanceIN that it would not be commenting on this morning’s news.
It’s been a whirlwind couple of weeks for Gravity4, whose core offering can be found in a Marketing Cloud that allows the running of search, social, native and email ad campaigns on a global scale, with programmatic trading an option.
The company hit the headlines last week after an ‘unsolicited’ $350 million takeover bid for programmatic ad-buying platform Rocket Fuel was rejected on the grounds of a lack of credibility.
Just two days later, rumours circulated over the company’s interest in Tradedoubler, which were given weight following an official statement from the Sweden-headquartered firm.
It read: “Tradedoubler has noted the media’s coverage of Gravity4’s interest in acquiring the shares in Tradedoubler for a price corresponding to a total value of SEK 282 millions, to be compared with the current value on the stock exchange of SEK 299 millions. Tradedoubler can confirm that it has received a letter from Gravity4 stating its non-binding interest in acquiring shares the company.”
Gravity4 followed up by saying it would look to the purchase of Tradedoubler to aid its reach in markets aside from the US.
With offices in Sweden, France, Switzerland, Spain, Germany, Italy, Poland, the Netherlands and two in the UK, Tradedoubler’s physical presence on the continent would work in the favour of an effort to expand within the EU.