Less than two weeks after completing its merger with the Conduit toolbar division ClientConnect, Perion Network is in talks to merge with digital advertising company myThings, sources have told TheMarker.
The merger, which sources said values myThings at $120 million, has been in negotiations for months, but both sides waited for Perion’s merger with Conduit to be completed before moving ahead. Carmel Ventures, a major venture investor in myThings, helped bring together the merger, which will involve a mix of cash and Perion shares.
Since it was formed in 2005, some $37 million has been invested in myThings by venture capital funds including Accel Partners, T-Venture (the VC arm of German telecommunications company Deutsche Telekom) and Carmel, which the technology news site TechCrunch says also granted the startup a $3 million loan. Industry sources said myThings’ shareholders were not going to earn a significant payback from the merger.
Perion said it would not respond to reports regarding of any merger talks with myThings, and as of late Sunday the company had made no formal statement to the Tel Aviv Stock Exchange. Shares of Perion closed up 2.3% to 45.35 shekels ($13) on the TASE Sunday.
Two weeks ago Perion CEO Josef Mandelbaum told Reuters that another merger was likely with the aim bringing revenues to $1 billion in the next five years. “This deal [with Conduit] is a great stepping stone,” he said. “We are not where we want to be yet. We have to do more investments and acquisitions to fill in the gaps.”
ClientConnect gave Perion, which makes desktop programs for email, photo sharing and web security, a platform designed to give mobile application publishers and developers a way to improve their distribution and money-making capabilities.
MyThings provides so-called retargeting services to large retailers, which allows them to identify online users’ interests to target relevant advertisements to them. MyThings tracks users surfing large e-commerce sites and collects data on the products they looked at. What distinguishes the company from other targeting services is its ability to identify users across different websites and collect targeting data from all of them.
MyThings’ clients are primarily in Europe, including Britain’s CarPhone Warehouse and the German apparel and shoe retailer Zalando. The French retail site Priceminister is reportedly its largest customer. Industry sources say that myThings’ posted revenues of $40 million last year but that it has yet to become profitable. Its main competitor is the French firm Criteo, which raised $250 million in a U.S. share offering in October that valued the company at $1.7 billion. Criteo now trades at a market value of $2 billion.