Transaction is Immediately Accretive and is Expected to Accelerate Perion’s Rapidly Growing Video Advertising Business; Management Raises 2021 and 2022 Revenue and EBITDA Guidance

Perion Network Ltd., a global advertising technology company that delivers a holistic solution across the main pillars of digital advertising – search, social media, display, and video / CTV – announced today the acquisition of Vidazoo, a leading video technology company that enables both advertisers and publishers to deliver high impact content and advertising to consumers. Perion acquired Vidazoo for a total amount of $93.5 million, consisting of $35.0 million in cash upon closing with an additional maximum of $58.5 million structured as a performance earn-out, if certain EBITDA-based targets are achieved.

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“The video advertising market is massive but highly concentrated among the largest publishers and broadcasters”

Vidazoo, founded in 2014 by Daniel Slivkin, Gal Dagan and Roman Svichar, and headquartered in Tel Aviv, is a highly differentiated video monetization platform which allows digital publishers to generate new, incremental revenue through its unique set of video products.

“The video advertising market is massive but highly concentrated among the largest publishers and broadcasters,” said Doron Gerstel, Perion’s CEO. “Just as Shopify’s platform enables thousands of stores to compete with Amazon and Walmart, Vidazoo empowers hundreds of video-hungry publishers with a simple, highly scalable, plug-and-play video solution. By combining our high-impact video suite and Vidazoo’s unique online video player (OVP), we are offering an END to END video solution, eliminating all existing intermediate functions, and creating a direct, simpler and transparent relationship between advertisers and publishers.”

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Vidazoo’s video monetization solution is differentiated by three unique capabilities:

• A proprietary online video player (OVP) and integrated ad server, which allows publishers and brands to upload, manage and stream video content. Vidazoo’s OVP is certified with the major advertising platforms and compatible with all devices and video formats. The Vidazoo OVP is integrated with a proprietary ad server, ensuring a consistent user experience by reducing latency and errors, adding to its inherent power and efficiency.

• A sophisticated yield management platform (YMP), which automatically optimizes and prioritizes publishers’ direct campaigns and open marketplace demand based on specific KPIs, and which is expected to be embedded into Perion’s intelligent hub (iHub).

• A rich video content and ad marketplace, with connections to multiple content providers and more than 20 programmatic platforms. Perion will expand this marketplace with its existing buy side relationships.

Daniel Slivkin, Chief Executive Officer of Vidazoo, commented, “We are thrilled to be joining the Perion family to drive continued growth and vision of Vidazoo video monetization technology across all screens. Through Perion’s HUB we will have direct access to high-impact video campaigns which is what premium publishers are looking for. Perion is an ideal growth partner and opportunity multiplier, across all dimensions of our current and future business.”

Raymond James acted as financial advisors to Perion.

Transaction Terms

Under the terms of the acquisition agreement, Perion has acquired all the shares of Vidazoo for $35.0 million in cash upon closing, with an additional maximum of $58.5 million structured as a performance earn-out through 2023. The earn-outs are tied to EBITDA-based metrics that would be paid in full if Vidazoo generates $32.4 million of Adjusted EBITDA in aggregate, through the end of 2023. If Vidazoo achieves all of its performance goals through 2023, the total maximum consideration would be $93.5 million.

Outlook

Perion is raising guidance to account for the expected contribution from the Vidazoo acquisition, which expected to be earnings accretive immediately.