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LONDON, UK / ACCESSWIRE / September 7, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for YuMe, Inc. (NYSE: YUME), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=YUME. RhythmOne PLC announced on September 04, 2017, that it has signed an agreement to acquire all outstanding shares of YuMe. The cash plus stock deal is valued at approximately $185 million based on current exchange rates. The transaction will create a complete end-to-end platform in the digital video advertising marketplaces. For immediate access to our complimentary reports, including today's coverage, register for free now at:
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Details of the acquisition
RhythmOne plans to complete the acquisition of YuMe by paying approximately one-third of the offer price in cash and balance approximately two-thirds in stock of the Company. Accordingly, shareholders of YuMe will receive $1.70 (approximately £1.32) in cash and balance in 0.7325 Consolidated Shares of RhythmOne for each YuMe's share. Based on the transaction price, shareholders of YuMe will receive $5.25 for each YuMe's share held by them.
Certain directors and senior officer of YuMe together own nearly 31.6% of YuMe Shares. These majority shareholders have signed an agreement to support the acquisition and agreed not to sell or dispose their stake for six months from the close of the transaction. The acquisition is conditional to a majority of YuMe's shareholders tendering their YuMe's shares as well as YuMe having a minimum of $32 million in cash and cash equivalents at the time of closing of the transaction. The acquisition agreement also has a clause for termination fee, wherein YuMe would have to pay $5,536,790 (approximately 3% value of the transaction) to RhythmOne if the deal is not completed under certain scenarios. Members of the RhythmOne and YuMe's Board have already approved the deal. The transaction is expected to close in Q1 2018 and is subject to receiving approvals from anti-trust regulators and shareholders' approval and other closing conditions.
Sharing his views on the acquisition, Ted Hastings, CEO of RhythmOne, said:
"Acquiring YuMe accelerates RhythmOne's strategy to build a unified programmatic platform with unique audiences of differentiated quality at scale. Through YuMe, RhythmOne gains access to premium video supply including emerging, high-value connected TV inventory, unique customer insights, cross-screen targeting technology and established demand relationships. We believe this combination will give RhythmOne the resources, relationships and talent to drive value for its shareholders, and a true return on investment."
Paul Porrini, CEO of YuMe added:
"We are proud of the business we have built at YuMe, and our success in delivering innovative technologies that have helped our clients achieve their marketing goals. Together, RhythmOne and YuMe have an opportunity to transform digital advertising with an adaptive platform that connects premium demand and supply with efficiency and performance at its core."
Benefits of the deal
RhythmOne and YuMe deal will combine the demand-side and supply-side strengths and requirements of the online advertising industry on one platform. The acquisition of YuMe will allow RhythmOne to expand its access to mobile, desktop, and connected TV video inventory thereby offering a single window catering to requirements of brand advertisers. YuMe not only provides high-quality video inventory, it also has content catering to premium demand on connected TV, an entirely new space for RhythmOne. Advertisers are looking at alternative digital mediums to traditional TV advertisements. The acquisition will allow RhythmOne to offer wider alternatives like connected TV etc to such Advertisers. The consolidation of programming platform will allow RhythmOne to bring together premium mobile, video, and connected TV inventory on one platform. This will add to the supplycontent of the Company which has increased due to its earlier strategic acquisitions viz., Perk Inc. in January 2017 and RadiumOne, Inc. in June 2017. The transaction is also expected to be accretive to the Company's earnings in 2019 and result in annual cost savings of approximately $10 million to $12 million.
Details of Share Consolidation
RhythmOne also announced that the Company plans to consolidate its ordinary shares. Accordingly, every 10-ordinary share issued by the Company with a capital value of £0.01 each will be consolidated into one Consolidated Share. These Consolidated Shares will continue to enjoy the same rights and benefits as the earlier shares. In the cases where the Consolidated Shares of any shareholder is not divisible by 10, the Company plans to issue an entitlement to the fraction of a Consolidated Share. The decision will be taken at the Company's Annual General Meeting scheduled on September 25, 2017. The date of the General Meeting will also be the record date for the consolidation of shares. The aim of the consolidation of shares is to reduce the number of shares issued and that they can be traded at a reasonable figure.
Redwood City, California based YuMe was established in 2004 and founded by Jayant Kadambi and Ayyappan Sankaran. It is a multi-screen video advertising technology Company that is defining the next generation of TV brand advertising. The Company sells multi-screen digital video media to TV brand advertisers and their agencies. The Company provides programmatic brand solutions with data-driven audience insights that empower brand advertisers to engage and influence their most promising audiences and increase engagement and sales. YuMe extends data-driven audiences to any TV or digital screen. The Company had total assets valued approximately $143 million as on June 30, 2017.
About RhythmOne PLC
San Francisco, California based RhythmOne was founded in 2004 in the UK. It is a technology-enabled digital media Company that connects online audiences with brands through premium content across devices. It is a major player in the digital advertising space with a strong presence in video, mobile, and programmatic. The Company plans to be a one-stop-shop catering to all advertisers' needs. RhythmOne's goal is to maximize the return on advertising spend and provide the most efficient and effective marketplace for digital advertising. The Company has global presence with offices in the US, the UK, and Canada.
Last Close Stock Review
On Wednesday, September 06, 2017, the stock closed the trading session at $4.53, tumbling 7.74% from its previous closing price of $4.91. A total volume of 622.74 thousand shares have exchanged hands, which was higher than the 3-month average volume of 302.15 thousand shares. YuMe's stock price skyrocketed 10.92% in the last three months, 54.36% in the past six months, and 61.17% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have soared 53.06%. The stock is trading at a PE ratio of 40.45 and has a dividend yield of 2.65%. At Wednesday's closing price, the stock's net capitalization stands at $188.81 million.
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