Mandalay Digital Group, Inc. (NASDAQ: MNDL), a company that provides operators and Original Equipment Manufacturers (OEMs) around the globe with end-to-end mobile solutions, has entered into a definitive merger agreement to acquire Appia, an independent mobile user acquisition network.
Led by Jud Bowman, founder and CEO, Appia Appia provides an independent mobile user acquisition network, which has delivered more than 85 million app installs for hundreds of advertisers. In addition, the company partners with publishers including app developers, mobile websites, and carriers to maximize their advertising revenue.
Appia, which operates in multiple offices worldwide including San Francisco, Singapore, Durham, Cork, and Mexico City and is backed by venture capital firms including Venrock, Trident Capital, DCM, and Eric Schmidt’s TomorrowVentures, had unaudited revenues of $30m for the twelve months ended September 30, 2014.
Led by Bill Stone, CEO, Mandalay Digital specializes in monetizing mobile content, games, payment, commerce, music, streaming and eBook applications for wireless carriers and OEMs. Together with Appia, Digital Turbine will offer a complete solution for them to get the right apps to the right user at the right time.
The terms of the transaction
Mandalay Digital will issue a number of shares and stock options to purchase its common stock equivalent to $100m less Appia’s net debt and transaction expenses (subject to working capital adjustments), at an agreed-upon value for Mandalay Digital common stock of $4.50 per common share.
Based on an estimate of Appia’s net debt at closing, including transaction fees and expenses, Appia stockholders would receive in the aggregate approximately 19 million shares, representing pro forma ownership of the combined company of approximately 33%. Mandalay Digital is acquiring Appia’s equity for $65m based on its closing stock price as of November 12 of $3.40. It will assume approximately $10m of Appia indebtedness, which Mandalay expects to refinance.
The transaction is expected to close in the first quarter of calendar 2015. Mandalay Digital, which operates through its Digital Turbine subsidiary, intends to change its name to Digital Turbine during the month of January 2015 or at the transaction’s close if earlier.