London-listed iGaming marketing firm XLMedia (XLM) has strengthened its social and mobile marketing capabilities with the $19m acquisition of of ExciteAd Digital Marketing.

XLM said the acquisition will immediately be earnings enhancing and described it as being in line with the group’s strategy of expanding and diversifying into complementary areas.

XML will acquire ExciteAd Digital Marketing (EDM), trading as DAU-UP, for US$12m in cash up front, with two additional payments totalling $7m based on the company’s EBITDA over a two-year period.

Israel-based EDM specialises in social and mobile advertising, focused on user acquisition for social gaming applications. It key focus is the US market, with interests in other English and German-speaking territories.

XLM said the acquisition will provide growth opportunities in the fast-expanding social gaming market, without the regulatory scrutiny that comes with the online gambling sector, although it acknowledged that EDM's mobile expertise will also aid expansion into the mobile gaming sector.

It added that the lack of regulatory risk will allow XLM to strengthen its position in markets such as the UK and US and diversify away from its core Scandinavian markets.

In the year to June 30th 2014, EDM generated revenue of $12.8m with a pre-tax profit of $3m.

XLM chief executive Ory Weihs commented that he was delighted to have sealed the acquisition, which he said was the largest deal since the company was listed on London’s Alternative Investment Market in March this year.

“One of the main reasons behind our IPO was to enable the Group to act as a consolidator in highly fragmented markets,” Weihs continued. “Since listing, we have been working hard to execute such deals and are therefore excited to conclude the acquisition of EDM, a global leader in the social and gaming marketing arena.”

“EDM represents a highly complementary fit for our business, is immediately earnings enhancing, strengthens our reach in the US, delivers diversification into social gaming and extends our current gambling expertise and customer base,” he explained. “We look forward to working with the EDM team and to continue to execute our stated growth strategy.”

Shares in XLMedia plc (Co.Data) (AIM:XLM) were trading up 8.75 per cent at 65.25 pence per share in London this morning following the announcement.


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