iMedia Announces Accretive Acquisition of Synacor’s Portal & Advertising Business Segment

Rhea-AI Summary

iMedia Brands (Nasdaq: IMBI) announced the acquisition of Synacor’s Portal and Advertising business segment, now rebranded as Media Commerce Services (MCS), closing on July 30, 2021. The acquisition aims to enhance iMedia's service offerings in online and OTT media commerce, leveraging its interactive video expertise. iMedia expects MCS to generate $40 million in profitable revenue over the next year, targeting growth in the $9+ billion OTT advertising market and the $200+ billion online advertising market.

Positive

• Acquisition expected to generate at least $40 million in profitable revenue within 12 months.
• Targets growth in the $9+ billion OTT advertising market and $200+ billion online advertising market.
• Enhances iMedia's interactive video expertise, potentially strengthening competitive position.

Negative

• None.

Accelerating iMedia’s Growth in Online and OTT Media Commerce Services

MINNEAPOLIS, Aug. 03, 2021 (GLOBE NEWSWIRE) -- iMedia Brands, Inc. (“iMedia” or the “Company”) (Nasdaq: IMBI) announced that on July 30, 2021, the Company closed on the acquisition of Synacor’s Portal and Advertising business segment. Financial terms were not disclosed.

This acquisition is another example of iMedia’s strategy to leverage its interactive video expertise and national television promotional power, as well as its merchandising, customer solutions and fulfillment capabilities, to build unique media commerce services that the Company believes will accelerate its timeline to become the leading single-source partner to advertisers seeking to use interactive video to drive growth in the online and OTT ecosystems. In 2019, iMedia acquired Float Left, a leader in building and managing OTT applications and services for media companies across all major OTT and CTV devices, including Roku, Amazon Firestick, Apple TV and Samsung Smart TVs.

Synacor Portal and Advertising, which iMedia has renamed to Media Commerce Services (MCS), creates and manages end-to-end, white-label digital home-page platforms for domestic multichannel video programming distributors (MVPDs) and internet service providers (ISPs). MCS monetizes these platforms with advertising and shares the advertising revenue with the respective publisher. MCS also offers various advertising solutions to additional online publishers, which includes MCS’s proprietary monetization platform that unifies supply-side-platforms (SSPs) and demand-side platforms (DSPs) and manages online publishers’ advertising sales operations.

iMedia expects this transaction to be accretive and expects MCS to generate at least $40 million in profitable revenue over the next twelve months. iMedia will be focused on competing for share in both the emerging $9+ billion OTT advertising marketplace, as well as the $200+ billion online advertising marketplace, against other digital services companies like Squarespace, Shopify and GoDaddy.

Commenting on this acquisition, Tim Peterman, CEO of iMedia, said: “The management team we are acquiring is strong and their advertising technology services are compelling. We know their MVPD and ISP customers well and are excited about the growth possibilities of empowering this team to leverage iMedia’s assets to create differentiated service offerings. I want to thank Synacor’s CEO, Himesh Bhise, for his partnership in completing this transaction and look forward to continued product partnerships with Synacor in the future.”

“iMedia will be a good fit for our talented Portal and Advertising team, and the combination will be beneficial for our MVPD, ISP and Publisher customers,” said Synacor CEO Himesh Bhise. “Synacor is now a pure-play, cloud-oriented software company, even more focused on growing and investing in our high-performance Cloud ID Identity Management and Zimbra Collaboration platforms.”

Lake Street Capital Markets, LLC served as financial advisor to the Company for the transaction.

About iMedia Brands, Inc.

iMedia Brands, Inc. (Nasdaq: IMBI) is a leading interactive media company that owns a growing portfolio of lifestyle television networks, consumer brands, online marketplaces and media commerce services that together position the Company as a leading single-source partner to advertisers and consumer brands seeking to entertain and transact with customers using interactive video.

About Synacor

Synacor, Inc. is a cloud-based software and services company serving global video, internet and communications providers, device manufacturers, governments and enterprises. Synacor’s mission is to enable its customers to better engage with their consumers. Its customers use Synacor’s technology platforms and services to scale their businesses and extend their subscriber relationships. Synacor has built its brand on email and collaboration platforms and cloud-based identity management, and also managed portals and advertising solutions. For more information, visit www.synacor.com. 

About Lake Street Capital

Lake Street Capital Markets is a research-powered boutique investment bank focused on high-growth industries including technology, consumer, healthcare and clean-tech to serve institutional and issuer clients raise. Since founding our firm in 2012, we have completed over 200 investment banking transactions and helped raise more than $9 billion of growth capital for our clients.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This document may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact, including statements regarding the expected revenue and profitability performance of the Company’s Media Commerce Services business are forward-looking. The Company often use words such as anticipates, believes, estimates, expects, intends, seeks, predicts, hopes, should, plans, will and similar expressions to identify forward-looking statements. These statements are based on management's current expectations and accordingly are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained herein due to various important factors, including (but not limited to): variability in consumer preferences, shopping behaviors, spending and debt levels; the general economic and credit environment, including COVID-19; interest rates; seasonal variations in consumer purchasing activities; the ability to achieve the most effective product category mixes to maximize sales and margin objectives; competitive pressures on sales and sales promotions; pricing and gross sales margins; the level of cable and satellite distribution for the Company’s programming and the associated fees or estimated cost savings from contract renegotiations; the Company’s ability to establish and maintain acceptable commercial terms with third-party vendors and other third parties with whom the Company has contractual relationships, and to successfully manage key vendor and shipping relationships and develop key partnerships and proprietary and exclusive brands; the ability to manage operating expenses successfully and the Company’s working capital levels; the ability to remain compliant with the Company’s credit facilities covenants; customer acceptance of the Company’s branding strategy and its repositioning as a video commerce Company; the ability to respond to changes in consumer shopping patterns and preferences, and changes in technology and consumer viewing patterns; changes to the Company’s management and information systems infrastructure; challenges to the Company’s data and information security; changes in governmental or regulatory requirements; including without limitation, regulations of the Federal Communications Commission and Federal Trade Commission, and adverse outcomes from regulatory proceedings; litigation or governmental proceedings affecting the Company’s operations; significant events (including disasters, weather events or events attracting significant television coverage) that either cause an interruption of television coverage or that divert viewership from its programming; disruptions in the Company’s distribution of its network broadcast to customers; the Company’s ability to protect its intellectual property rights; our ability to obtain and retain key executives and employees; the Company’s ability to attract new customers and retain existing customers; changes in shipping costs; expenses related to the actions of activist or hostile shareholders; the Company’s ability to offer new or innovative products and customer acceptance of the same; changes in customer viewing habits of television programming; and the risks identified under Item 1A(Risk Factors) in the Company’s most recently filed Form 10-K and any additional risk factors identified in its periodic reports since the date of such Form 10-K. More detailed information about those factors is set forth in the Company’s filings with the Securities and Exchange Commission, including its annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this announcement. the Company’s is under no obligation (and expressly disclaim any such obligation) to update or alter its forward-looking statements whether as a result of new information, future events or otherwise.

Contacts:

Media:
press@imediabrands.com
(800) 938-9707

Investors:
Gateway Investor Relations
Cody Slach
IMBI@gatewayir.com
(949) 574-3860

FAQ

What is the significance of iMedia's acquisition of Synacor's business segment?

The acquisition enhances iMedia's capabilities in online and OTT media commerce and aims to accelerate its growth in the advertising sector.

How much revenue is iMedia expecting from the Media Commerce Services business?

iMedia expects the Media Commerce Services business to generate at least $40 million in profitable revenue over the next twelve months.

What market opportunities is iMedia targeting with this acquisition?

iMedia is targeting growth in the $9+ billion OTT advertising marketplace and the $200+ billion online advertising marketplace.

What will Synacor's Portal and Advertising business be renamed to?

The business will be renamed to Media Commerce Services (MCS).