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VETRYA acquires the 100% of Viralize, a leading company recognized on digital video advertising based on artificial intelligence.
VETRYA acquires the 100% of Viralize, a leading company recognized on digital video advertising based on artificial intelligence.
In the years 2016-2018, Viralize recorded an increase in revenues from Euro 3.9 million in 2016 to Euro 6.7 million in 2017, to exceed Euro 14.5 million in 2018 (preliminary data to be subject to audit).
The expected EBITDA for 2018 is higher than Euro 2.6 million (preliminary data to be subject to audit). The total consideration for 100%, determined on the basis of Ebitda 2018 and adjusted for Ebitda 2021, will be between a minimum of € 10 million and a maximum of € 15.950 million and will be determined by applying a multiplier of 5.5. at the 2018 Ebitda and 2021 in Viralize. The net financial position of the target is estimated for 2018 close to zero. The payment of the consideration is foreseen for 50% in cash at the closing, which will take place within the month of March and for the remaining 50% following the approval of the 2021 budget of Viralize. The second payment can be made, at the discretion of Vetrya, for 70% in Vetrya shares. The purchase is subject to the positive outcome of the legal and fiscal due diligence and to the obtainment of a "clean" certification by EY on Viralize's 2018 consolidated financial statements which, contractually, will be used for accounting due diligence purposes. Through this acquisition, the Vetrya Group strengthens its range of digital services and the internationalization process.

Vetrya [VTY.MI], the leading Italian group recognized in the development of digital services, cloud computing platforms, application solutions and broadband services, announces that it has finalized the acquisition of 100% of the share capital of Viralize Srl ("Viralize", or "Target"), an Italian company based in Florence, a recognized leader in digital video advertising.

Viralize was born in 2013 in Italy, and today the platform that has the same name, is a recognized leader in the distribution of advertising videos based on artificial intelligence.

The Viralize platform connects direct online publishers, creators of video content and advertisers. Supports Publisher and Creator in the distribution and monetization of video and display content. Brand and Media Agencies have access to quality video inventory, on an international basis and on different audiences.

Market leader in advertising, among the first worldwide companies (the first in Italy) to have introduced the video content auto play on the mobile, Viralize has a network of more than 5,000 direct publishers subscribed to the platform, a library of over 500,000 videos (qualified according to IAB categories) in 18 languages and more than 3,000 advertising campaigns directly for the major Italian and international brands and media agencies.

In 2018 Viralize recorded revenues in excess of Euro 14.5 million (preliminary data subject to audit), a sharp increase compared to Euro 6.7 million in 2017 and Euro 3.9 million in 2016.

In the same three-year period EBITDA also recorded an exponential growth, going from Euro 116 thousand in 2016 to Euro 492 thousand in 2017, up to Euro 2.6 million in 2018 (to be subject to audit).

The "Price" will be calculated based on the following formula:

Price = (EBITDA 2018 x 5.5) +/- PFN 2018

on the basis of the "2018 Financial Statements", to be understood as the consolidated financial statements of Target as of 31 December 2018 subject to certification without exceptions, recalls of disclosures or other information from the Independent Auditors EY (which is itself an Auditing company that certifies the Vetrya budgets).

Payment will be made according to the following methods:

a)     on the Execution Date of the contract, and in any case within four months: 50% of the Price

b)     at the end of the 60th day following the date of approval by the Board of Directors of Viralize of the consolidated financial statements for the year ended December 31, 2021 duly certified by the Independent Auditors: 50% of the Price

The contract provides that, for the purposes of calculating the consideration referred to in point a), 2018 EBITDA may not in any case be higher than Euro 2.6 million.

On the occasion of the payment of the consideration referred to in the previous point (b), 100% of the Price will be recalculated on the basis of the following formula (the "Revised Price"):

Price = (EBITDA 2021 x 5.5) +/- PFN 2018

the price can in no case be less than 10 million euros (the "Minimum Price").

For the purposes of defining the Revised Price, EBITDA 2021 cannot in any case be higher than Euro 2.9 million.

In the case in which the Revised Price should be lower or equal to the Minimum Price, the portion of the Price still owed by the Buyer in favour of the Sellers, corresponding to the difference between the amount already paid and the Minimum Price, will be paid pro-quota in cash in one solution.

In the event that the Revised Price is higher than the Minimum Price, the residual portion exceeding the amount referred to the Minimum Price may be paid to the Sellers at the Buyer's discretion:

        i.          in cash in a single solution according to the procedures described in the preceding paragraph; or

      ii.          for at least 30% in cash in the same manner as above and up to a maximum of 70% by assigning 2021 Vetrya ordinary shares to the Sellers.

If the payment of a part of the price is made in Vetrya shares, such circumstance will result in a modest dilutive effect on the investments held by the other shareholders of the Company.

These shares will be subject to a look-up on 100% of the shares for 12 months from the assignment, beyond that date the sellers will have the right to sell 1/12 (one twelfth a month); Vetrya will have a pre-emption on these monthly lots.

The contract is subject to various conditions precedent, including the main outcome of the fiscal and legal due diligence that will be conducted by Vetrya in the period between the Subscription Date and the Execution Date. For the purposes of accounting due diligence, Vetrya will rely on the certification of the 2018 Target Budget, as previously illustrated.

The contract will provide that sellers issue statements and guarantees typical of transactions of this nature.

The contract provides for the acquisition, in different percentages and with different payments, in compliance with the 50% total at closing and 50%, as detailed above after the end of the financial year 2021, which in any case lead to 100% control , from the following sellers:

·        Nana Bianca S.r.l .;

·        Program 101 SICAF S.p.A .;

·        Club Italia Investimenti 2 S.p.A .;

·        Marco Paolieri;

·        Maurizio Sambati;

·        Ugo Vespier;

·        Club Digitale S.r.l .;

·        Salvatore Amato;

·        Lubafin S.r.l .;

·        Francesco Niutta.

As part of the agreements relating to the transaction, the founding partners Marco Paolieri, Maurizio Sambati and Ugo Vespier are expected to continue to manage the company. In particular, Marco Paolieri will retain the role of CEO with the same powers of today and Maurizio Sambati and Ugo Vespier will remain Chief Technology Officer and Chief Product Officer.

Luca Tomassini, Founder, President and CEO of the Vetrya Group, declared: "Vetrya was born with the mission of promoting customers' success thanks to the ability to technologically enable the changes offered by the Network. The acquisition of Viralize pursues this mission and will allow the group to grow strong with a complementary business model and a mutual international presence. Complementary businesses that share common values: focus on value innovation, speed, flexibility and the constant desire to look for useful solutions for customers. This acquisition follows the recent participation in Neosperience in the field of artificial intelligence, as well as the recent presentation of the unique solution of multiview streaming on the 5G network for TIM and Qualcomm that saw us main characters in Barcelona as part of the Mobile World Congress. I want to thank all the people who made this new chapter possible, and the Viralize group for joining us on this very special journey which, as we indicated in the IPO phase, would have developed with the growth of internal and external lines ".

In the operation, vetrya has been assisted by the Studio Grimaldi law firm in the person of the lawyer Paolo Daviddi and the SICAF 4AIM, in the person of the Chairman Mr. Giovanni Natali.

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