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Taboola Going Public In SPAC Deal

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Taboola Going Public In SPAC Deal

Israeli open web company Taboola is going public via a SPAC deal.

The SPAC Deal: Taboola, which provides recommendations for the open web, is valued at $2.6 billion in a SPAC deal with ION Acquisition Corp (NYSE: IACA).

The $285 million PIPE on the SPAC deal is led by investors that include Fidelity, BlackRock and Hedosophia. Current shareholders of will own 10% of the new company.

Related Link: 10 SPACs Trading Under $11 For Investors To Consider In 2021

About Taboola: Taboola distributes personalized content into mobility platforms including websites, devices, TV apps and mobile apps. The company’s recommendation platform powered by artificial intelligence helps provide over one trillion recommendations a month.

The company has 516 million daily active users. The open web advertising segment is highly fragmented and worth over $64 billion. Taboola believes it operates as a search engine in reverse, providing recommended sites to users.

Taboola has partnerships with over 9000 digital properties, including CNBC, NBC News and Business Insider.

Taboola lists Digital Turbine (NASDAQ: APPS) and PubMatic Inc (NASDAQ: PUBM) as competitors. PubMatic went public in 2020 and is now valued at $1.8 billion. Digital Turbine, which has a market capitalization of $6 billion, is up over 800% in the past year.

Growth Ahead: Taboola plans on investing $100 million in research and development as part of the deal. Growth initiatives include investments in artificial intelligence, e-commerce, television and device manufacturers.

A couple of Taboola's key assets it will use for growth ahead: Taboola’s technology includes over 500 developers and the company's advertisers platform includes over 12,000 potential customers.

Financials: Revenue for Taboola is estimated at $379 million in fiscal 2020. Operating income for 2020 is estimated at $34 million.

Taboola is estimating revenue to grow at a compounded annual growth rate of 20%. The company sees revenue of $455 million in fiscal 20221 and $516 million in fiscal 2022.

The company expects adjusted EBITDA margins to hit 30%.

The deal values Taboola at a multiple of 4.5x enterprise value/revenue for fiscal 2021 and 3.9x the same multiple in 2022.

Price Action: Shares of ION Acquisition are up 32% to $16.70 at publication time.

 

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