French media giant Publicis Groupe is buying a 20% stake in Israeli digital media ad company Matomy Media Group (LSE:MTMY) for $65.6 million at £2.27 per share. Matomy has given Publicis an option to buy a further 4.9% stake at the same price. If the option is taken up then Publicis would have bought 24.9% of Matomy for $81.7 million.
Tel Aviv-based Matomy, founded in 2006 by ad executive and Chairman Ilan Shiloah, completed its IPO on the London Stock Exchange in July when it raised $70.1 million at a share price of £2.27, the same amount that Publicis paid in yesterday's deal. Matomy's IPO was no simple matter. It had initially been planned for April at a company value of $500 million and included an offer to sale shares by its owners. But "due to market conditions," the IPO was postponed by three months and its company value was cut to $347 million.
Matomy provides a digital network that mediates between advertisers and those with ad space to sell.
Shiloah said, “Our vision is to build the best performance-based media company in the world, and with Publicis Groupe becoming our largest shareholder, we will be able to create a more mature and sustainable ecosystem, providing marketers with an unprecedented ability to accurately engage, acquire and retain customers."
As part of the sale, Shiloah will reduce his stake in the company from 24.38% to 15.44%. But Shiloah added that Matomy is in no need of cash and that only existing shares have been sold with no new shares being issued.
Publicis has 45 days to take up its option to buy 4.9% more.
Publicis CEO Maurice Levy said, “Tel Aviv is second only to the Silicon Valley in technological innovation and patents. Matomy is fueled by the innovators and technology experts of Israel and has quickly risen to the top of this important market by creating a world-leading, state-of-the-art platform."
Published by Globes [online], Israel business news - www.globes-online.com - on October 13, 2014
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