Jordan Bevan
MGI’s mobile ad tech unit VerVe Group announced on Tuesday that it has acquired digital ad tech company Smaato. The deal values Smaato at $170 million (£122.6m).
MGI Group, which is listed on the Frankfurt stock exchange and the Stockholm-based Nasdaq stock exchange, has updated its financial forecast this year from an initial guidance of about $272 million to $288 million following the Smaato deal, according to an investor presentation Wednesday.
The Smaato deal positions Verve as one of the top global mobile ad exchanges, with a joint team of over 300 employees spread across 25 offices worldwide.
“We are thrilled to welcome Smaato to the Verve Group family, and we look forward to extending their premium inventory and product suite to our partners,” said Sameer Sondhi, chief revenue officer at Verve Group. “Smaato’s expansion into innovative omnichannel monetisation solutions will play a key role in strengthening Verve Group’s offerings globally.”
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Founded in 2005, Smaato, a San Francisco and Hamburg-based mobile SSP, has integrations with gaming apps and social media companies, and has a global user reach of 1.3 billion, according to an investor presentation. Considering MGI runs many games and has the Verve ad tech unit with a pre-existing mobile SSP, this compares pretty well to MGI’s 1.4 billion user reach. The company said that after the deal, consolidated user access will be at least 1.8 billion users.
“Joining Verve Group signals an exciting new opportunity for Smaato to expand its products to MGI’s wider audience, including the 5,000 casual games owned by its gaming segment,” said Shen Wei, shareholder representative at Smaato. “Having the support of Verve Group and its parent company MGI (and access to its first-party data from its owned games) provides Smaato with more reach, technical resources, and top talent to continue providing the results Smaato’s clients have come to expect.”
Given Smaato’s reach and large supply pool, MGI and Verve Group showed investors that the sticker price was a relative steal compared to mobile ad technology companies in the public market. Smaato’s $170 million valuation is roughly 3.5 times its total revenue. MGI is trading at 4.1x revenue. But mobile ad tech companies like AppLovin and ironSource are worth 12.7x and 22.5x their annual revenue.
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