Otello Corporation ASA

M&A Activity • Feb 26, 2021

Otello Announces Definitive Agreement to sell AdColony to Digital Turbine

Otello Announces Definitive Agreement to sell AdColony to Digital Turbine

Otello announced today that it has entered into a definitive agreement to sell

AdColony to Digital Turbine, Inc. (Nasdaq: APPS) for a total estimated

consideration of $400 million.

Digital Turbine is a global mobile technology company, passionate about

delivering the right content to the right person at the right time across all

Android devices. The company's on-demand media platform powers frictionless app

and content discovery, user acquisition and engagement, operational efficiency,

and monetization opportunities. Digital Turbine's technology platform has been

adopted by more than 40 mobile operators and OEMs worldwide, and has delivered

more than three billion app preloads for tens of thousands of advertising

campaigns. The Company is headquartered in Austin, Texas, with global offices in

Arlington, Durham, Mumbai, San Francisco, Singapore and Tel Aviv.

Total estimated consideration for the acquisition is $400 million, including a

normalized amount of working capital and $19 million in cash. Some or all of the

cash will be returned to Otello subject to the achievement of certain future net

revenue targets: (1) $100 million in cash to be paid at closing (2) $100 million

in cash to be paid six months following the closing, and (3) on-target earn-out

of $200 million, to be paid fully in cash, based on AdColony achieving certain

future target net revenue objectives in 2021. The earn-out portion is not capped

and is subject to change based on actual results.

"AdColony has been a very successful turnaround over the last 3 years which was

crowned with 15% YoY growth in 2020 vs 2019 and very solid EBITDA margins. We

are big believers in AdColony, its people and its products, but also see the

need to participate in a consolidating market where bigger is better," said Lars

Boilesen, CEO of Otello. "AdColony is excited to join the successful team at

Digital Turbine. The underlying strategic rationale for the combination is very

promising. We believe that Digital Turbine, with its massive user base,

extensive global relationships and distribution, will be uniquely positioned to

benefit via the seamless integration of AdColony's mobile video advertising

expertise and global brand advertiser awareness.  The combination will yield a

highly-differentiated and more vertically-integrated solution for the mobile

advertising industry. We look forward to joining Digital Turbine to help

navigate this innovation."

"We are extremely excited to announce the acquisition of AdColony today," said

Bill Stone, CEO of Digital Turbine.  "We look forward to welcoming the AdColony

team to the Digital Turbine family and believe that this strategic transaction

accelerates our growth and is a positive for our partners, advertisers,

employees and shareholders. AdColony saw the secular tailwinds toward mobile,

video and high-speed networks like 5G before most and has been able to

capitalize on its vision.  The ability for Digital Turbine to utilize AdColony's

unique mobile advertising solutions across our vast device distribution

footprint unlocks significant new monetization opportunities for the combined

company's platform offerings.  With the addition of AdColony, we will expand our

collective experience, reach and suite of capabilities to benefit mobile

advertisers and publishers around the globe.  Performance-based spending trends

by large, established brand advertisers present material upside opportunities

for platforms with unique technology deployable across exclusive access to

inventory."

The transaction is supported by the Board of Directors of Otello (the "Board")

as well as the management of Otello and AdColony. The Board will submit the

transaction to the Otello shareholders for approval at an extraordinary general

meeting expected to take place on or about 25 March 2021 (the "EGM"). Approval

will require a majority in favor among votes and shares represented at the EGM.

The transaction is expected to close by end of March 2021. The completion of the

transaction is subject to customary closing conditions. LUMA Securities LLC

acted as exclusive financial advisor and Hogan Lovells LLP served as legal

advisor to Otello in conjunction with the transaction.

Petter Lade, CFO

Phone: +47 91143878

E-mail: petterl@otellocorp.com

About Otello:

Otello holds shares in several different businesses, including (i) AdColony

which helps publishers monetize their content through advertising and

advertisers reach the audiences that build value for their businesses,

capitalizing on a global consumer audience reach that exceeds 2 billion; (ii)

Bemobi, a Mobile Media and Entertainment company which integrate people and

mobile content through technology and offers a leading subscription-based

discovery service for mobile apps in Latin America and beyond; (iii) Skyfire

which offers cloud-based network solutions for mobile operators and (iv) Vewd

which offers OTT services in the Connected TV space.