Israeli open web company Taboola is going public via a SPAC deal.
The SPAC Deal: Taboola, which provides recommendations for the open web, is valued at $2.6 billion in a SPAC deal with ION Acquisition Corp IACA.
The $285 million PIPE on the SPAC deal is led by investors that include Fidelity, BlackRock and Hedosophia. Current shareholders of will own 10% of the new company.
Related Link: 10 SPACs Trading Under $11 For Investors To Consider In 2021
About Taboola: Taboola distributes personalized content into mobility platforms including websites, devices, TV apps and mobile apps. The company’s recommendation platform powered by artificial intelligence helps provide over one trillion recommendations a month.
The company has 516 million daily active users. The open web advertising segment is highly fragmented and worth over $64 billion. Taboola believes it operates as a search engine in reverse, providing recommended sites to users.
Taboola has partnerships with over 9000 digital properties, including CNBC, NBC News and Business Insider.
Taboola lists Digital Turbine APPS and PubMatic Inc PUBM as competitors. PubMatic went public in 2020 and is now valued at $1.8 billion. Digital Turbine, which has a market capitalization of $6 billion, is up over 800% in the past year.
Growth Ahead: Taboola plans on investing $100 million in research and development as part of the deal. Growth initiatives include investments in artificial intelligence, e-commerce, television and device manufacturers.
A couple of Taboola's key assets it will use for growth ahead: Taboola’s technology includes over 500 developers and the company's advertisers platform includes over 12,000 potential customers.
Financials: Revenue for Taboola is estimated at $379 million in fiscal 2020. Operating income for 2020 is estimated at $34 million.
Taboola is estimating revenue to grow at a compounded annual growth rate of 20%. The company sees revenue of $455 million in fiscal 20221 and $516 million in fiscal 2022.
The company expects adjusted EBITDA margins to hit 30%.
The deal values Taboola at a multiple of 4.5x enterprise value/revenue for fiscal 2021 and 3.9x the same multiple in 2022.
Price Action: Shares of ION Acquisition are up 32% to $16.70 at publication time.
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