Following rumours of its possible sale, Tradedoubler has moved to confirm that US marketing group Gravity4 has declared a “non-binding” interest in acquiring shares in the company.
Murmurs of a shock SEK 282 million (£21.6 million) deal being in the works gathered pace as the trading of Tradedoubler stock was halted earlier today (May 15).
While it is unknown if this would constitute a full buy-out, the value would mark a huge departure from the SEK 6.3 billion ($900 million) offered to Tradedoubler in 2007 by AOL, which was subsequently turned down by majority shareholder Alecta.
Reports from Swedish financial newspaper Dagens Industri had linked Gravity4 to a new deal, with official news thought to be on the way by 4:00pm when the Stockholm stock exchange – Nasdaq OMX – closed.
Adding to the surprise, the news comes just two days after Gravity4 had a ‘non-credible’ $350 million bid for programmatic firm Rocket Fuel rejected.
Tradedoubler has offered clarity on the situation through issuing the following statement:
“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.
“No formal takeover offer has been presented. No further comments will be made by Tradedoubler at this point.”
The bulk of Gravity4’s service offering is packed into the company’s Marketing Cloud – a platform which includes services for paid search, display, mobile and video among others.
A new approach
Standing as one of the original pioneers in affiliate marketing, Tradedoubler has recently switched its focus to the development of performance marketing technology in an effort to combat a decline on the network side of the business.
At the time of AOL’s bid, the company was coming of age – reporting revenue of SEK 515.9 million for Q4 2006, which marked a 51% lift on the SEK 341.9 million generated during the same end-of-year period in 2005.
A bid from AOL was turned down on the grounds of Tradedoubler’s “future prospects”, according to a statement from the company’s board.
In its report for Q1 2015, released last week, the company recorded earnings of SEK 432 million, with this showing a decline of 11% when adjusted for changes in FX rates.
Net sales at the group rose to SEK 2,613 million in 2011, but this had slowed to SEK 1,743 million by the end of last year.