M&A Alert—February 24, 2014
Oracle Acquires Data Management Platform BlueKai for a Reported $350mm – $400mm
Author: Tom Brehme
Transaction Size: $350 - $400mm
On February 24, 2014, Oracle (NYSE: ORCL, market cap: $170b) announced that it signed an agreement to acquire BlueKai, a cloud-based data management platform. Although terms of the deal were not officially disclosed, reports indicate Oracle paid approximately $350mm – $400mm.
BlueKai offers a cloud-based data management platform (DMP) that enables companies and marketers to personalize online, offline and mobile marketing campaigns with richer and more actionable information about target audiences. BlueKai’s platform helps manage large stores of consumer and audience profile data that it gathers from a combination of first and third party data sources. BlueKai clients can obtain profile data based on a variety of factors, including past purchases, lifestyle interests, demographics, clickstreams and geographic similarities.
As a consumer visits websites on BlueKai’s network, those sites place cookies on the individuals’ computer, which passively track anonymized Internet browsing data via that cookies’ unique ID. BlueKai’s partner and customer companies use this data to profile consumers by geographic location, type of employment, income brackets, spending habits, etc. BlueKai’s platform takes these characteristics and creates audience profiles allowing for targeted marketing campaigns. Recently, BlueKai has been working on doing the same with smartphones, allowing marketers to know that the person who visited a website with a mobile phone is the same person who visited on a desktop.
BlueKai’s Audience Data Marketplace is one of the largest in behavioral targeting, maintaining a warehouse of data on about 700mm people. Approximately 300 companies use its data to personalize marketing campaigns on the web and mobile devices.
Bellevue, WA-based BlueKai was founded in 2007 and has raised approximately $42.0mm in funding from Battery Ventures, e.ventures, GGV Capital (Glenn Solomon, Jeff Richards), Pinnacle Ventures (Kenneth Pelowski), Redpoint Ventures (Chris Moore), Sequel Venture Partners (Timothy Connor) and Split Rock Partners.
Oracle’s legacy is its market-leading database management systems. Over the last decade, Oracle has built and acquired a broad range of enterprise software products including tools for application development, enterprise resource planning (ERP), customer relationship management (CRM) and supply chain management software. Since 2012, Oracle has acquired 20 companies including Responsys ($1.5b; digital marketing company, announced but not closed), Eloqua ($871mm; cloud-based marketing automation software), Vitrue ($300mm; social marketing platform provider) and Taleo ($1.9b; cloud-based talent management provider).
Steve Miranda, Oracle’s EVP of Applications Development, was a key executive sponsor of this transaction.
Transaction Value: $350mm – $400mm
TV/LTM Revenue ($64mm) 5.5x – 6.3x
Comparable transactions in the data management platform space include Neustar’s acquisition of Aggregate Knowledge for $119mm, Adobe’s acquisition of DemDex for $58mm, iCrossing’s acquisition of CoreAudience (Red Aril), IBM’s acquisition of Unica for $490mm and Teradata’s acquisition of Aprimo for $500mm.
BlueKai competitors include eXelate, AudienceScience, LiveRamp and Lotame, among others.
BlueKai will be integrated with both Responsys and Eloqua for business-to-consumer and business-to-business marketing automation, in an effort to deliver personalized customer interactions across all marketing activities and channels. BlueKai’s data will give marketers the ability to look beyond traditional B2B targeting criteria – such as name, industry, website visits and webinar attendance – to hundreds of other B2C profile characteristics that BlueKai captures, such as spending habits, travel preferences and lifestyle interests.
Architect Partners’ Observations
Data management platforms (DMPs) are evolving beyond their roots in aggregating and analyzing first and third party user data for enhancing the effectiveness of biddable display ad buying. By attaching pre-built audience segments (think “soccer mom”, or “business traveller”) to scores of anonymous “cookied” users, marketers were able to make better-informed decisions around the value of biddable ad impressions that were available through ad exchanges. The ability to value and bid on those impressions becomes all the more important as the industry experiences rapid growth in real-time bidding.
Today’s data-driven marketers (such as Oracle’s big enterprise customers) need “enterprise” data management platforms that can connect and analyze volumes of previously siloed marketing data and execute campaigns and personalized experiences. In other words, they need DMPs that can connect known customer marketing data – gathered through CRM, web analytics tools, mobile app usage, etc. – with advertising data gathered through anonymized cookies – to not only better target and message potential customers but to create more personal and customized on-site experiences.