Otello Corporation ASA

M&A Activity • Apr 29, 2021

Otello Announces Completion of AdColony Acquisition by Digital Turbine

Otello Announces Completion of AdColony Acquisition by Digital Turbine

Otello Corporation ASA ("Otello") announced today that Digital Turbine, Inc.

(Nasdaq: APPS) has completed its acquisition of Otello's subsidiary, AdColony

Holding AS ("AdColony"). The acquisition of AdColony, a leading mobile

advertising platform servicing advertisers and publishers with a reach of more

than 1.5 billion monthly global users, is integral to Digital Turbine's

expressed strategy to provide a comprehensive media and advertising solution for

Digital Turbine's operator and OEM partners while enriching the mobile

experience for end users by delivering highly relevant content. AdColony's

proprietary video technologies and rich media formats are widely viewed as best

-in-class technology delivering industry-leading third-party verified

viewability rates for well-known global brands.

"We are excited to have formally closed the acquisition of AdColony," said Bill

Stone, CEO of Digital Turbine.  "We believe that this strategic transaction,

along with the previously completed acquisition of Appreciate and pending

completion of the Fyber acquisition, will synergistically accelerate our growth

and is a real positive for our partners, advertisers, employees and

shareholders. 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."

"AdColony is excited to join the successful team at Digital Turbine and to

become an important part of Digital Turbine's media and advertising solution.

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 AdColony helping Digital Turbine navigate this innovation," said Lars

Boilesen, CEO of Otello.

Trading update - March Quarter Preliminary Results for AdColony

AdColony continued its strong growth in 1Q21, delivering revenue of $58.3

million and growth of 37% vs.1Q20. This was slightly above the midpoint of the

guidance provided and continued the acceleration from what AdColony delivered in

4Q20.

AdColony Consideration and & Earn-out

Initially, the total estimated consideration for the acquisition of AdColony by

Digital Turbine was $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.

Consideration for the acquisition will be as follows: (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.

Actual, unaudited 1Q21 performance for AdColony on net revenue was @ 106.35% vs.

the plan agreed with Digital Turbine, which is tied to our annual guidance of

$250-290 million in Gross Revenue. Due to the earn-out plan acceleration of

performance above 105%, AdColony's 1Q21 performance extrapolated for the full FY

2021 would yield a payout of around 131% of plan or around $262 million for the

earn-out portion of the payment.

Petter Lade, CFO

Phone: +47 91143878

E-mail: petterl@otellocorp.com