Taboola on Friday announced its intent to acquire Connexity from Symphony Technology Group for approximately $800 million, with a mix of cash and Taboola shares, several weeks after going through an initial public offering.
This acquisition creates a company with ex-TAC gross profit of more than $500 million, and approximately $185 million of adjusted earnings before interest, taxes, depreciation, and amortization, (EBITDA) during the twelve months ended March 31, 2021.
“We’re specifically excited about ecommerce because it has so many synergies with what we do, and it’s a $35 billion market in the U.S. alone,” said Adam Singolda, CEO and founder, Taboola. “We think it can be very appealing to merchants who look to diversify outside of Amazon on the open web, and all the publishers we work with. About 62% of the publishers in the U.S. have an open web strategy.”
When Taboola went public, it told investors its growth strategy consisted of “Recommend Anything,” which means finding things to recommend beyond news such as games, apps and ecommerce. The other strategy consists of “Recommend Anywhere,” which means making recommendations on the television, in the car, and other devices.
Connexity -- formerly Shopzilla -- is one of the largest independent ecommerce media platforms in the open web, serving more than 1,600 direct merchants, and 6,000 publishers.
Its technology reaches more than 100 million unique shoppers monthly through publisher relationships with Condé Nast, DotDash, Hearst, Vox Media, Meredith, and News Corp Australia, and others. It also supports the integration of more than 750 million products on publisher websites for companies such as Walmart, Wayfair, Skechers, Macy’s, eBay, and Otto.
“We were fortunate to build a relationship with Connexity during the past few years, so they called us when they were considering the sale,” he said.
When asked whether Taboola will complete with Amazon, he said not as a consumer brand, but rather distributing products across the internet to help publishers. He said “Taboola will always be a B2B company to support publisher partners and help them reach into ecommerce.”
Today’s deal represents Taboola’s fifth acquisition and adds more than 200 people to their team, bringing the number of total employees to approximately 1,600. Bill Glass, Connexity CEO, and the Connexity management team will lead the newly formed business unit at Taboola.
Connexity generated $158 million of revenue, $63 million of ex-TAC Gross profit and $28 million of adjusted EBITDA in 2019, growing to $176 million of revenue, $78 million of ex-TAC Gross profit and $38 million of adjusted EBITDA in 2020, driven by expansion of its merchant customer base, as well as the integration of Skimlinks’ market-leading commerce content technologies.