M&A Alert—May 2, 2017
Quotient Technology acquires mobile marketing company Crisp Media.
Author: Eric Risley, John Ascher-Roberts
Transaction Size: $33mm–$57.5mm
On May 2, 2017, Quotient Technology Inc. (NasdaqGS: QUOT) announced an agreement to acquire mobile advertising company Crisp Media for up to $57.5 million.
Crisp Media provides a range of local advertising solutions using mobile phones for CPG and retail market segments. It offers Engage, a self-service advertisement platform to build, manage, and measure multi-platform rich media campaigns; and Crisp MoCA, a proprietary end-to-end platform that links data and analytics and offers time-specific targeting of shoppers with personalized marketing and advertising messages. Competitors include 4Info, Gimbal, Medialets, PlaceIQ, and xAd.
Xavier Facon, CTO, Matt Curinga and Mary Park co-founded the New York-based company in 2003. The company raised $16 million in funding from investors including EDB Investments, Intel Capital (Ranjeet Alexis) and Meritage Funds (Derek Pilling, Douglas Holladay).
Quotient Technology runs Coupons.com, a leading digital promotion and media platform that connects brands, retailers, and consumers. The company distributes digital coupons and media through a variety of products, including: digital printable coupons, digital paperless coupons, coupon codes, and card linked offers. The company’s distribution network includes approximately 30,000 third-party publishers, as well as its mobile applications, Coupons.com and Grocery iQ, and those of its many partners. It also has a data management platform, Retailer iQ, that its clients use to collect and analyze brand customer data to deliver personalized digital coupons, e-receipts, media, and digital rebates tailored to each customer. Clients include hundreds of consumer packaged goods companies, such as Clorox, Procter & Gamble, General Mills, and Kellogg’s.
Quotient Technology has a market capitalization of $975 million and LTM revenues of $282 million. Mir Aamir, President and COO of Quotient, was the internal champion of this transaction.
Quotient Technology is acquiring Crisp Media for up to $57.5 million with $33 million in upfront consideration ($20 million in cash and $13 million in stock) and an additional $24.5 million in contingent consideration payable a year after closing if certain financial metrics are met, according to Quotient Technology’s press release.
Transaction Value: $33mm–$57.5mm
TV / Invested Capital 2.1x–3.6x
TV / Predicted Annualized Post-Acquisition Revenue 1.7x–2.9x
Comparable transactions include Harland Clarke’s acquisition of RetailMeNot in April 2017 for $630 million (2.2x LTM revenue, covered here), The Mobile Majority acquisition of Gimbal in December 2016 (undisclosed, covered here), Ebates’s acquisition of Shopular in March 2016 (undisclosed), Groupon’s acquisition of Swarm Mobile for $11.2 million in November 2014 (2.5x invested cap), and Coupons.com’s acquisition of Buy Yub for $30 million in December 2013.
Crisp’s expertise in targeted mobile advertising for CPG brands complements Quotient Technology’s existing promotions and efforts to expand shopper marketing. Quotient Technology will gain a substantial presence in its mobile offerings while Crisp Media will gain access to a wider range of coupon and cash back offerings that will allow it to better target its app users with better tailored savings. Quotient will also now have a hyperlocal platform that it can integrate into Retailer iQ to feed it relevant location data to deliver timely and even more personalized messages.
Architect Partners’ Observations
Beacons and proximity marketing programs are being used by nearly half of all retailers this year, according to Retail Touchpoints, up from just 15 percent last year. Crisp Media brings location analytics expertise that will strengthen Quotient Technology’s ability to attribute media campaigns to in-store sales. Retail sales driven from beacon technology were projected to hit $44 billion in 2016, according to Business Insider Report, up from just $4 billion in 2015. Retailers are flocking to beacon programs in part because, according to Ninth Decimal, 61 percent of shoppers prefer to receive in-store offers versus having to research and bring coupons with them. These trends have driven the shift among CPGs from paper to digital coupons and mobile advertising, which motivates Quotient Technology’s acquisition of Crisp Media.