German media company Axel Springer has agreed to acquire 93 percent of eMarketer for $242 million. eMarketer is a provider of high-quality analyses, reports, and digital market data for companies and institutions, based in New York City.
This is the second big U.S. acquisition for Axel Springer, which bought Business Insider last year for $450 million. The acquisition of eMarketer strengthens Axel Springer’s position in business-related news and content. The company was founded in 1996 and currently employs more than 180 people.
eMarketer is the go-to source for excellently researched, authoritative business information in the fields of digital marketing, sales, and trends. The company’s reports, databases, statistics, infographics, and forecasts have become standard tools in numerous industries and are cited more than 65,000 times per year by leading international media, according to own sources. More than 1,000 firms are holding subscription contracts with eMarketer, among them most Fortune 500 companies. Around 81 percent of eMarketer’s revenues come from these subscription services. The remainder comes from the company’s website, which has extensive openly accessible information, and from its newsletters, which are read by hundreds of thousands of marketing professionals.
Mathias Döpfner, Chief Executive Officer of Axel Springer SE: “As more and more industries are facing the challenge of digitization, the smart creation, processing, and presentation of relevant market information is becoming increasingly important. eMarketer is a long-established, successful, and profitable publisher of high-quality digital market data and is excellently positioned to benefit from these market developments. The acquisition of eMarketer follows our strategy of expanding our US activities and strengthening our paid models. At the same time, eMarketer perfectly complements our business services BI Intelligence and POLITICO Pro in Europe, from which we know the attractiveness of strong subscription-based businesses. The convincing growth and margin prospects for eMarketer make this transaction another element in Axel Springer’s successful digital transformation.”
Terry Chabrowe, co-founder and CEO eMarketer: “We’re excited to become part of the Axel Springer family. Their commitment to digital and strategic vision makes them the ideal partners for the next stage of eMarketer’s growth. Just as important, the cultural fit between our two organizations is the kind we dreamed of when we began looking for the right home for our business.”
The transaction is based on a company valuation of eMarketer of approximately $250 million. Taking into account the company’s cash and debt, Axel Springer is paying approximately $242 million for 93 percent of the shares. Together, eMarketer’s co-founders Terry Chabrowe, Chief Executive Officer, and Geoff Ramsey, Chief Innovation Officer, will continue to hold around seven percent of the company. Both co-founders are long-term committed and will keep their positions.
In 2015, eMarketer Inc. achieved revenues of $45.5 million and an EBITDA of $13.5 million. For 2016, eMarketer expects revenues of around $53 million and an EBITDA of around $18.5 million, a margin of around 35 percent. For its reports, databases, and forecasts, it operates comprehensive research efforts, supplemented with the aggregation of third-party data. Its business intelligence products have become a much-valued basis for strategic business decisions in many companies, most notably in the advertising industry. In addition to its New York City headquarters, eMarketer is also operating a London office for serving the European market.
Axel Springer will finance this acquisition using existing credit lines. The transaction is subject to approval by relevant antitrust authorities.