Millennial Media / JumpTap Merger details
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Transcript of Millennial Media / JumpTap Merger details
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August 13, 2013
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Safe Harbor
This presenta,on contains forward-‐looking statements that are subject to risks and uncertain,es. All statements other than statements of historical fact included in this presenta,on are forward-‐looking statements. Forward-‐looking statements give our current expecta,ons and projec,ons rela,ng to our financial condi,on, results of opera,ons, plans, objec,ves, future performance and business. You can iden,fy
forward-‐looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “may,” “will,” “could,” “should,” “expects,” “intends,” “plans,” “an,cipates,” “believes,” “es,mates,” “predicts,” “projects,”
“poten,al,” “con,nue,” and other words and terms of similar meaning in connec,on with any discussion of the ,ming or nature of future
opera,ng or financial performance or other events. For example, all statements we make rela,ng to expected synergies from the combina,on, expected full year 2013 pro forma combined guidance, expecta,ons regarding the ,ming of closing, poten,al strategic
benefits of the combina,on, our es,mated and projected costs, expenditures, cash flows, growth rates and financial results, our plans and objec,ves for future opera,ons, growth or ini,a,ves are forward-‐looking statements. All forward-‐looking statements are subject to risks and uncertain,es that may cause actual results to differ materially from those that we expected. These and other risks and uncertain,es
associated with our business are described in our filings from ,me to ,me with the Securi,es and Exchange Commission. Any forward-‐looking statement you see or hear during this presenta,on reflects our current views with respect to future events and is subject to these and other risks, uncertain,es, and assump,ons, and therefore are not guarantees of future performance. We assume no obliga,on and do
not intend to update these forward-‐looking statements even if new informa,on becomes available in the future.
Included in this presenta,on are certain measures presented on a basis other than in accordance with generally accepted accoun,ng principles (GAAP). Millennial Media believes presenta,on of these non-‐GAAP measures are useful to understand Millennial Media's performance, as it excludes certain non-‐cash and other charges that many investors believe may obscure Millennial Media’s on-‐going
opera,ng results. Investors are encouraged to review the related GAAP financial measures and the reconcilia,on of these historical non-‐GAAP financial measures to their most directly comparable GAAP financial measure included in this presenta,on and in the 10-‐K and other filings Millennial Media has filed with the SEC.
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Agenda
Introduction Transaction Overview Strategic Rationale
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Call Participants
Paul Palmieri
Chairman & CEO Millennial Media
George Bell
CEO Jumptap
Michael Avon
EVP & CFO Millennial Media
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Overview of Jumptap
Founded: 2004 #4 participant in the US mobile display market
Location: Boston, MA Leader in mobile performance advertising
Employees: 197 Processing more than 2 billion ads per day
User Pro!les: 120M (45M Cross-screen) 20+ data partnerships
2012A Revenue: $63.6M / $53.0M1 69 employees in product development
2011A – 2012 Rev. Growth1: 49% 105 sales representatives
7 sales offices
55 issued patents and more than 50 pending
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1 $53.0 revenue for Jumptap excludes Portal revenue. 2011-2012 revenue growth based on revenue excluding Portal.
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Transaction Overview
Consideration
n Stock-for-stock transaction with minor cash component (employees’ taxes and unaccredited investors)
n Shareholders of Jumptap to receive approximately 24.6 million shares1 (based on Millennial Media stock price as of August 9, 2013)
— Implies approximately 22.51% ownership for Jumptap shareholders
Governance n George Bell to be added to the Millennial Media Board of Directors as Vice Chairman, bringing total number of board seats to 8
Timetable n Expected to close in Q4 2013
Closing Conditions
n Millennial Media shareholder approval
n Regulatory approvals
n Other customary conditions
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1 Based on closing stock price of $9.13 as of 9-Aug-2013. Cash payment not to exceed $12 million with final mix to be determined by final share price at time of close. Overall ownership of equity could increase or decrease based on cash payment.
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Complementary assets and capabilities (technology, data, RTB, IP)
Bolsters position as clear market leader among independent mobile advertising
providers
Strategic Highlights
Deepens management bench in a fast growing and competitive environment
Estimated synergies and future cost avoidance of $20-25 million in 2015
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2012 Market Share US Third Party Mobile Display
Unique opportunity to add scale, bene!ting both sets of platform
participants, developers and advertisers
Combination creates clear independent market leader
Source: IDC
Google 29.0%
Pro Forma Combined
Millennial Media 28.7%
Apple 14.8%
All Others 27.5%
Jumptap Contribution
10.7%
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Global Scale Matters
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§ Developers desire a limited set of partners to monetize their apps
§ Advertisers and agencies seek to buy at scale, with fewer, full-service partners
§ Data driven business model with powerful network effects
§ Mobile advertising opportunity is global Key office locations
Key regional partner offices
Market is demanding global digital advertising platforms
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Complementary Assets and Capabilities
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Brand & Premium Performance
Performance / RTB Some Brand Demand Side Focus
First Party Third Party
Partnerships Data Asset
Smartphone, Tablet Smartphone, Tablet, PC Screens Targeted
North America, APAC, Europe, LatAm US Markets Served
Strategically Positioned with Mobile Developers Exchange Buying Supply Side Focus
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Accelerates Millennial Media’s Programmatic Strategy
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Sophisticated Bidding Tools
To Be Launched This Year
>2 Billion RTB Requests Per Day
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Adding Management Team Depth
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Bob Hammond | CTO, Jumptap § Previously SVP of Technology at Vibrant Media
§ Prior to that, VP of Engineering at Yahoo for video platform and syndication
§ Bob joined Yahoo through the acquisition of Maven Networks where he led engineering
Frank Weishaupt | COO, Jumptap § Leads sales and operations at Jumptap
§ Spent 10 years at Yahoo where he played a number of key operating roles including VP of Advertising Marketplaces where he led monetization strategy for North America’s search, display and platform business
Adam Soroca | Chief Product Officer, Jumptap § History with Jumptap of over 8 years
§ Key architect of Jumptap’s performance business, exchange buying capabilities and cross-screen solution
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Synergies and Integration Costs
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Synergies
§ Primarily cost avoidance – Engineering/product and sales professionals !ll previously
planned hiring needs at Millennial Media § Data center consolidation § Ad serving platform consolidation § Other G&A
Integration Costs § Expected one-time transaction and integration cost of approximately $11 million in 2013
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Financial Overview
$ in millions
2012A Revenue $177.7 $63.6 / $53.01
Adjusted Gross Pro!t2 $71.9 $22.8
Adjusted Gross Margin2 40.5% 35.8%
Adjusted EBITDA2 $4.5 $(10.7)
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Note: Jumptap figures are preliminary and unaudited. 1 $53.0 revenue for Jumptap excludes Portal revenue. 2011-2012 revenue growth based on revenue excluding Portal. 2 Adjusted Gross Profit and Adjusted EBITDA conformed to Millennial Media reporting policies.
Expected Pro Forma Combined Full Year 2013 Guidance:
n Revenue: $340 – $350 million n Adjusted EBITDA: $(1) – $1 million
Expected Synergies:
n 2015: $20–25 million
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Timetable to Close
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Event Expected Timeline
Millennial Media Shareholder Vote and Regulatory Approvals Approximately 10–12 weeks
Close Transaction Q4 2013
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With Jumptap, The Millennial Media Platform Will Be The Leading Audience and Data Platform For Digital Media
n Globally recognized brand
n The only independent leader with significant scale
n Trusted partner to both brand and performance advertisers
n Differentiated technology platform powered by growing data asset and targeting capabilities
n Independent company focused on the mobile advertising opportunity
n Significant patent portfolio
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AEBITDA RECONCILIATION
AEBITDA RECONCILIATION $ in thousands 2012 2012
Net Loss (5,430) (13,043)
Adjustments: Interest expense 63 875 Income tax expense 70 - Depreciation and amortization expense 2,365 596
Other Income/Interest - 378 Stock-based compensation expense 7,474 526
Total net adjustments 9,972 2,375
AEBITDA $ 4,542 $ (10,668)
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Additional Information
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Additional Information about the Proposed Acquisition and Where You Can Find It Millennial Media, Inc. (“Millennial”) plans to !le a proxy statement with the Securities and Exchange Commission (the “SEC”) relating to a solicitation of proxies from its stockholders in connection with a special meeting of stockholders of Millennial to be held for the purpose of voting on the issuance of the shares of Millennial common stock to be issued in connection with the proposed acquisition (the “Shares”). BEFORE MAKING ANY VOTING DECISION WITH RESPECT TO THE ISSUANCE OF THE SHARES CONTEMPLATED BY THE PROPOSED ACQUISITION, MILLENNIAL SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The proxy statement and other relevant materials, and any other documents !led by Millennial with the SEC, may be obtained free of charge at the SEC’s website at www.sec.gov. In addition, stockholders of Millennial may obtain free copies of the documents !led with the SEC by contacting Millennial’s Investor Relations department at (410) 522-8705, or Investor Relations, Millennial Media, Inc.,2400 Boston Street, Suite 201, Baltimore, Maryland 21224. You may also read and copy any reports, statements and other information !led by Millennial with the SEC at the SEC public reference room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC’s website for further information on its public reference room. Interests of Certain Participants in the Solicitation Millennial and its executive officers and directors may be deemed to be participants in the solicitation of proxies from the stockholders of Millennial in favor of the proposed transaction. A list of the names of Millennial‘s executive officers and directors, and a description of their respective interests in Millennial, are set forth in the proxy statement for Millennial’s 2013 Annual Meeting of Stockholders, which was !led with the SEC on April 30, 2013, and in any documents subsequently !led by its directors and executive officers under the Securities and Exchange Act of 1934, as amended. If and to the extent that executive officers or directors of Millennial will receive any additional bene!ts in connection with the proposed transaction that are unknown as of the date of this !ling, the details of such bene!ts will be described in the proxy statement and security holders may obtain additional information regarding the interests of Millennial’s executive officers and directors in the proposed transaction by reading the proxy statement when it becomes available.