European online advertising network and marketing firm AdLink Group, part of Germanys ISP firm United Internet, has finally been sold off its display ad unit, AdLink Media, about 18 months after its hired Morgan Staley to do it: Hi-Media, the increasingly acquisitive French online media group, has bought the unit. AdLink is NOT selling off its other subsidiaries Sedo, the online marketplace for buying and selling domain names and websites, its affiliate marketing unit Affilinet, and Composite Digital, a provider of e-mail data and profiling tools.
The transaction is complex, as these cross-European deals involving to publicly traded companies on their respective countries’ exchanges usually do. With this deal, AdLink Group will hold about 11 percent stake in Hi-Media, becoming a major shareholder along with previous investors IDI and BV Capital. The cash component to AdLink will be 12.2 million Euros. AdLink will also give a loan to Hi-Media, repayable in 2011; it also has the rights to increase its stake in Hi-Media.
The display ad unit AdLink Media is valued at 29.4 million euros, the company says, and will be transferred to Hi-Media net of any cash and of all debt. The two companies hope to get cost synergies of 5 million Euros in first year of operation and expect the acquisition to be accretive as early as 2010. AdLink Media division had sales of 14.2 million Euros in Q109, according to its earnings report, and has 192 employees.
Hi-Media owns and operates a network of online media sites in France and Europe, has an online ad network, owns two online micropayment services Hi-Pay and Allopass, and two years ago it bought and Fotolog, one of the biggest online photo sharing sites, mainly outside U.S. With this deal, Hi-Media attempts to hedge its risks in the online ad market (and better monetization of its own local properties across Europe).
By Rafat Ali