M&A Alert—December 22, 2014
Oracle Acquires Purchase Data Aggregator, Datalogix
Author: Eric F. Risley, David Wei Liu
Transaction Size: undisclosed
On December 22, 2014, Oracle (NYSE: ORCL; market cap: $202b) announced the acquisition of Datalogix, a data analytics company focused on analyzing consumer purchase data, for $1.1 billion.
Datalogix tracks and analyzes consumer purchases (largely in-store purchases) where the identity of the consumer can be identified. Most often, Datalogix identifies the consumer and associates that consumer to a purchase by working with large retailers to get access to purchases made when a loyalty card has been used.
Datalogix then sells this data to marketers and media companies to help them better target specific consumers in both on-line and off-line marketing efforts as well as track the effectiveness of these marketing efforts.
Datalogix serves more than 650 brands, including 82 of the top 100 marketers such as Unilever, Ford, and Kraft and all major consumer segments including retail, CPG, automotive, telecom, travel, and financial services, and works with Facebook, Twitter, AOL, Yahoo. Datalogix captures over $2 trillion in annual consumer spending from 1,500 data partners across 110 million U.S. households. Competitors include Epsilon, Acxiom and Valassis.
Datalogix was founded in 2002 and has approximately 300 employees. It’s headquartered in Westminister, CO, with additional offices in New York City, San Francisco, Boston, Chicago, Detroit, and London. Datalogix has raised $86.5mm in six rounds of funding from SharesPost Investment Management, Institutional Venture Partners (Sanford Miller), Wellington Management, Costanoa Venture Capital, Sequel Venture Partners, General Catalyst Partners (Robert Gierkink, David Fialkow, Gabe Ling), and Breyer Capital (Jim Breyer).
Oracle offers corporations a wide variety of software and services to help them run their businesses. Over the past two years, Oracle has been an extremely active acquirer as it builds its products designed to help enterprise marketing departments attract and retain customers. Major marketing oriented acquisitions have included Responsys ($1.5 billion, not yet closed), Eloqua ($871 million), Vitrue ($300 million) and BlueKai ($350 – $400 million).
Oracle is buying Datalogix for a reported $1.1B.
Transaction Value: $1.1B
TV/Revenue Multiple ($199.5mm) 9.2x
TV/Invested Capital Multiple ($86.5mm) 12.7x
Comparable transactions include:
Axicom’s acquisition of LiveRamp ($310mm, 11.0x EV/Revenue, 9.7x EV/Invested Capital),
Oracle’s acquisition of BlueKai ($350mm – $400mm, 5.5x – 6.3x EV/Revenue, 7.0x – 8.0x EV/Invested Capital),
Neustar’s acquisition of Aggregate Knowledge ($119mm, 1.9x EV/Invested Capital),
Neustar’s acquisition of Taugus ($650mm, 4.4x EV/Revenue),
Adobe’s acquisition of Demdex ($58mm(a), 6.8x EV/Invested Capital).
(a) According to Business Insider
Digital marketing nirvana is delivering the right marketing message, to the right person at the right time and be able to measure the results. Data on consumer preferences, demographics, purchases, browsing habits, etc assist marketers to achieve those objectives. Datalogix brings valuable data on the actual spending of 110mm U.S. households into Oracle’s Marketing Cloud offerings. Together with Blukai, the data management platform which Oracle acquired in February 2014, Oracle now has both insightful data and a platform to manage and act upon it.
Architect Partners’ Observations
Data aggregators, such as Datalogix, Epsilon, Axciom and Valassis have built their businesses getting access to valuable data, analyzing it and packaging it in a variety of ways to suit the needs of their customers, largely marketers. For example, if Ford is seeking to market their new F-150 pickup truck to people in the North East who purchased a Toyota Tundra between 2005 and 2010, they would turn to these companies to help identify and contact this profile of consumer. Oracle’s acquisition of Datalogix is the first major acquisition of an aggregator of off-line consumer data by one of the “marketing cloud” providers who include Oracle, Salesforce, IBM and Adobe.