HYDERABAD: Taking cue from global players, YBrant Technologies, the only Indian company in the online advertising intermediary space, on Tuesday announced the acquisition of Israel-based Oridian Online Meida Solutions for $13 million which will be paid out over the next nine months.
This apart, it has identified three other companies. However, Suresh Reddy, chairman and managing director of the company did not want to name.
“Each of these acquisitions should be completed over the next six months and add to YBrant’s size,” he said.
Significantly, in a bid to fund the acquisition spree, YBrant has proposed a IPO to raise funds from the Indian market.
A Sebi approval is pending but prior to it in a pre-IPO placement the company has already raised $20 million from New York-based VC and hedge fund Sensar Capital.
“We placed 2.5 million shares with Sensar at a price of Rs 320 each translating roughly into 16% equity of the company,” he added.
However, given the hectic M&A activity in the market and the skyrocketing valuations for online advertising properties over the past six months and going by his own acquisitions line up over the next six months, Reddy felt the valuation for YBrant would be much higher.
YBrant has already acquired four companies: Pennyweb Inc, DW Ventures LLC, Wordcents LLC and Seenetix DOO, over the past two years.
The Hyderabad-headquartered company posted sales of $24 million last year and expects to log a growth rate of 40-50% during the current fiscal. It employed nearly 300 people as of August this year.
The global online advertising spends are expected to more than double to $25 billion by 2010.
According to Morgan Stanley Research, by 2010 search advertising alone would be around 50% of this market, followed by display and sponsorship ads with a 20% share of the pie. Rich media, classified and email advertising will make up the rest.
The key drivers of this growth will be creative digital marketing strategies and the underlying technology, says Suresh Reddy.
Having started by offering back-end technology to many online advertising giants like Double Click, Equantive and Right Media in the past, YBrant has struck out in the front-end business for a piece of the pie.
While the US online advertising market alone is estimated close to $20 billion, M&A activity has been at its peak over the past six months.
