real-time news and commentary for investors
Tuesday, Aug 13
Millennial Media buying rival for $197M, guidance fails to impress
- In tandem with its Q2 report, Millennial Media (MM) announces it's buying rival mobile display ad network Jumptap for 24.6M shares (worth $196.8M based on Millennial's AH trading price of $8). JumpTap shareholders will own 22.5% of the company post-acquisition.
- Millennial and Jumptap (occasionally feared as a rival and once planning an IPO) are apparently betting their combined forces will yield a tougher rival to Google's AdMob (the market's unquestioned leader) and Apple's iAd. Following disappointing guidance earlier this year, fears have been running high that Millennial is losing share.
- Those fears might not be soothed by Millennial's Q2 revenue miss, nor by its new guidance: Millennial projects the two companies will have combined 2013 revenue of $340M-$350M. Millennial had previously forecast 2013 revenue of $270M-$280M (up from 2012's $178M thanks to rapid industry growth), and Jumptap posted 2012 revenue of $63.6M.
- The companies are expected to have combined 2013 adjusted EBITDA of -$1M to $1M. Millennial previously expected 2013 adjusted EBITDA of $17M-$18M.
- Jumptap brings 100M user profiles (44M multi-screen) and a big patent portfolio (55 issued, 50 pending) to the table. Millennial had 450M monthly unique users at the end of Q2 (up 30M Q/Q) and supported 45K apps (up 3K Q/Q). $20M-$25M in deal synergies are expected.
- Millennial's Q2 opex rose 51% Y/Y, higher than rev. growth of 45%.
- MM -5.9% AH. Q2 results, PR, Jumptap slides