Israeli digital advertising company Matomy Media Group (LSE:MTMY); TASE: MTMY is selling activity that is not part of its core business for up to $11 million in cash. Part of the payment is performance-based. Matomy had $21.7 million in cash as of the end of 2016.
The purchaser is Dutch company Creative Clicks, Matomy's business partner, which will hire 60 of Matomy's employees, mostly from Israel.
Two months ago, Matomy announced its intention of focusing on its core business in order to ensure long-term growth, profits, and cash flow. "This sale is another milestone in the implementation of our new focus strategy. We are glad that these team members have found a warm home, and wish the purchasers great success in developing the business," said Matomy CEO Sagi Niri.
The activity being sold involves desktop and mobile agency business (planning and implementation processes for media purchasing for the purpose of bringing the customer users who will download apps). Niri explained, "The activity being sold is based on third party technologies, not ours, and includes more working hands. We are focusing on activities in which Matomy has unique technological platforms, and these are also activities relating to faster growing trends involving the digital industry, primarily video and mobile."
"Lean, operational, and profitable structure"
Niri said that after the sale, Matomy would have no more activity that was not part of its core business, and that the company was operating in a "lean, operational, and profitable structure." Matomy, which had 450 employees at the end of 2016, will have only 300 employees by the end of this year, following streamlining measures that included layoffs and the transfer of employees from activity being sold to Creative Clicks.
Creative Clicks CEO Raymond Kokken said, "We have been very impressed by the business and the team. They will be an excellent addition to the company's business, and we are confident that they will provide great value to advertisers, media partners, and our shareholders."
Matomy adopted its strategy focus after Niri, formerly the company's CFO and COO, replaced founder Ofer Druker as CEO under pressure from activist fund Brosh.
Matomy's current market cap is NIS 390 million. The company's share price has dropped 30% since it was dual-listed on the TASE in February 2016.
Published by Globes [online], Israel Business News - www.globes-online.com - on July 6, 2017
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