Perion Acquires Content IQ and Its Breakthrough Pub-Tech Optimization Solution to Strategically Propel Disruptive Synchronized Digital Branding Offering

Perion Network Ltd. (NASDAQ: PERI), a global technology company that delivers its Synchronized Digital Branding solution across the three main pillars of digital advertising - ad search, social media and display / video advertising - announced today that it has consummated the acquisition of Content IQ ("CIQa??). CIQ is a privately held company founded in 2014, based in New York City with offices in Tel Aviv, and employs 51 people. CIQ is a digital publishing orchestration system with proprietary data algorithms and analytic tools which deconstruct content, revenue and distribution to solve today's biggest digital publishing challenges.

Content IQ Financial Highlights and Outlook

Revenues for the first nine months of 2019 were approximately $26 million

Adjusted EBITDA for the first nine months of 2019 was approximately $4 million

Revenues for Full-Year 2019 are expected to be approximately $39 million

GAAP Net Income Full-Year 2019 is expected to be approximately $5.5 million

Adjusted EBITDA Full-Year 2019 is expected to be approximately $5.9 million

Under the terms of the agreement, Perion acquired all the shares of CIQ for a total consideration of $73.05 million, of which $15 million in cash was paid upon closing, with an additional maximum $11 million will be paid as a retention incentive. As part of the total consideration, there is a maximum of $47.05 million in earn-outs over a period of two years. The earn-outs are tied to revenue and EBITDA-based metrics that would be paid in full if CIQ generates $158 million in revenues and more than $17 million of EBITDA in aggregate, over the next two years. Further details on the agreement terms and earn-out provisions as well as a reconciliation between GAAP and non-GAAP financial measures are included in a Form 6-K furnished to the Securities and Exchange Commission.

Doron Gerstel, Periona??s CEO, commented, "As brands find it increasingly difficult to effectively tell their story to consumers, and branded content becomes a more critical and effective form of engagement, a new paradigm is required. Brands must gain the ability to scale to highly relevant audiences, and through that to assert greater control over the media environment. CIQa??s offering fills this gap and provides Perion with a proprietary solution that gives publishers and brands the tools they need to prosper in a challenging digital world.a??

Mr. Gerstel continued, "CIQ also prepares Perion for a a??cookie-lessa?? environment, as GDPR, CCPA and the advent of other regulations reshape the digital advertising ecosystem. Without cookies, publishers will have to find new ways to measure and track user engagement, thus increasing the value of content and contextual advertising. The acquisition of CIQ positions Perion to effectively address these evolving needs of brands, through the addition of industry-defining a??pub-tech capabilitiesa??, which use AI and machine learning to optimize content and page-level reader engagement.a??
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