Isranomics

Perion expands its horizons with the acquisition of Hivestack in a $100 million deal

by | Dec 13, 2023 | Company Reporting | 0 comments

Perion, a leading player in the digital advertising arena, has made a significant move by acquiring Canadian-based Hivestack for a hefty $100 million. This strategic investment marks Perion’s entrance into the realm of Digital Out of Home (DOOH) advertising, broadening its reach beyond social networks, content sites, and smart TVs.

The acquisition, led by Perion’s management, helmed by Tal Jacobson, positions the company at the forefront of the burgeoning DOOH market. Hivestack, established in 2017, has quickly risen to prominence despite the challenges posed by the COVID-19 pandemic in its founding year. With 154 employees across 32 countries, Hivestack brings advanced technology to the world of billboards, elevators, and various other digital screens outside the home.

Tal Jacobson highlights Hivestack’s unique offerings, stating, “Hivestack takes the format of billboards and adds many elements of technology to them.” The company’s comprehensive services cater to both sellers and buyers in the DOOH advertising ecosystem. On the sellers’ side, Hivestack provides ad server management, tender management, and order management systems. For buyers, it offers demand management technology with real-time campaign buying and optimization capabilities.

One of Hivestack’s standout features is its data-driven approach. Jacobson explains, “The company has statistical data such as the audience passing by the screen in terms of age, socio-economic breakdown, and the number of people passing by the ads.” This wealth of information enables precise ad targeting, allowing advertisers to tailor campaigns based on factors such as weather conditions or specific locations.

The move comes as the global DOOH market continues to grow, with estimates projecting a leap from $18.8 billion in 2022 to $30 billion by 2026, according to PQ Media. Perion’s acquisition of Hivestack is a strategic response to this growth, aiming to expand Perion’s global footprint and enhance its service portfolio.

The financial details of the deal reveal that Perion will pay an additional $16.7 million over three years based on Hivestack’s performance against financial goals, along with an $8.3 million sum to retain key employees. This brings the total transaction value to $125 million.

The acquisition aligns with Perion’s overarching goals, as Jacobson notes, “The purchase of Hivestack is another part of the process of offering a total advertising package to retail chains.” Perion envisions providing a comprehensive suite of advertising solutions, including video, audio, and now, out-of-home ads, aiming to solidify its presence with major clients such as Target.

Perion’s financial health appears robust, with revenues reaching $509 million in the first nine months of 2023, reflecting an 18% increase compared to the same period in 2022. Net profit for the same period amounted to $78 million, representing a notable 30% increase. The company’s cash reserves, totaling around $530 million as of September 2023, emphasize its financial strength post-acquisition.

Jacobson remains optimistic about Perion’s future, stating, “This is not the last purchase; we are currently working on additional transactions that may take place as early as 2024.” As Perion continues to evolve and expand its offerings, the acquisition of Hivestack signifies a pivotal moment in the company’s journey, positioning it as a formidable force in the dynamic landscape of digital advertising.

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