Zeta Global Holdings Corp. (ZETA) is making waves in the marketing technology space, announcing the acquisition of LiveIntent for a total of $250 million. This strategic move is expected to significantly bolster Zeta’s AI-powered marketing platform and propel its growth trajectory.
The acquisition will see Zeta pay $77.5 million in cash and $172.5 million in common stock at closing. The stock portion will be subject to a lockup and sale volume restrictions following its release. Adding to the deal’s potential, Zeta has included a potential earnout of up to $25 million per year, split 50% cash and 50% stock. This earnout will be based on achieving substantial Adjusted EBITDA growth and sustained margin expansion in 2025, 2026, and 2027.
Furthermore, Zeta will issue $25 million in Performance Stock Units to LiveIntent’s management team. This incentive is contingent on meeting specific performance and retention targets during the same period. The transaction is anticipated to be finalized in the fourth quarter of 2024, subject to customary closing conditions.
Zeta Global’s confidence in this acquisition is evident through its reaffirmation of its third-quarter 2024 guidance. The company expects revenue of at least $255 million and adjusted EBITDA of at least $50.2 million.
David A. Steinberg, Co-Founder, Chairman, and CEO of Zeta Global, expressed his excitement about the acquisition, stating, “As more brands view first party data as a corporate asset, seek to make AI actionable, and move towards a single platform that powers more efficient and effective marketing across the customer lifecycle, this acquisition accelerates Zeta’s flywheel and positions the combined company to continue to grow faster than the market.”
The acquisition is seen as a valuable strategic move, as LiveIntent’s assets, publisher network, and channel capabilities will significantly enhance Zeta Marketing Platform. The deal is expected to be immediately accretive to earnings, priced at a highly attractive Adjusted EBITDA multiple of ~16x. Zeta anticipates cross-selling opportunities with its existing customers, further accelerating LiveIntent’s growth while maintaining Zeta’s strong organic growth rates.
As of June 30, Zeta held cash and cash equivalents of $154.7 million, demonstrating its strong financial position. Investors seeking exposure to ZETA shares can explore the Invesco Dorsey Wright Technology Momentum ETF (PTF) and the Alpha Architect U.S. Quantitative Momentum ETF (QMOM).
Following the announcement, ZETA shares experienced a positive reaction, rising 4.27% to $33.20 in premarket trading. The market’s optimistic response suggests confidence in the deal’s potential to create value for both companies and their stakeholders.
