Why Singtel sold digital marketing unit Amobee to Tremor for US$239m

Tremor International is officially snapping up Singtel's digital marketing arm, Amobee, for US$239 million. This comes approximately a month after it was reported that the acquisition would be happening for about US$201 million.

According to Singtel, the divestment is in line with Singtel’s strategic reset to sharpen its business focus and recycle assets and capital into growth areas with higher returns.

Singtel Group CEO Yuen Kuan Moon added that the divestment reflects Singtel's resolve in executing to its strategic reset. "We are actively reshaping our portfolio to ensure optimal allocation of resources towards new growth drivers, as well as improve shareholder value," he added. Following the Amobee divestment, Singtel will cease to hold any equity interest in the Amobee business. 

Meanwhile, Tremor also listed its strategic rationale for the acquisition:

1. Accretive financial growth expected within the first 12 months of completion, largely across Tremor International’s DSP business. For the 12 months ended 30 June 2022, Amobee generated preliminary unaudited contribution excluding traffic acquisition costs of approximately US$150 million, excluding the results from Amobee’s email marketing platform, which Tremor said would reflect a significant addition to its platform.

2. Significantly enhance technology offering and business footprint across Tremor’s core growth drivers including self-service DSP, performance capabilities, CTV, and data, while also adding new insight tools, and linear TV capabilities.

3. Expand Tremor’s US and international presence and reach, given that Amobee currently serves more than 500 customers globally, including Fortune 500 brands and maintains strong relationships with media partners globally.

4. Grow and enhance talent across the company with additional experienced and capable industry experts that will join the Tremor International team.

5. Build upon Tremor's track record of successfully integrating acquisitions to drive growth, scale, and long-term value for shareholders at attractive valuations.

6. The combined company seeks to benefit from meaningful annual run-rate operating cost synergies.

While Tremor did not comment on MARKETING-INTERACTIVE's queries about potential leadership changes within Amobee post-acquisition and the fate of conflicting clients, its spokesperson said: "Industry expertise and talent was a component in our decision to acquire Amobee. We're excited about the significant synergies between the companies and will continue to review our structural alignment post-acquisition. At the moment, however, we're focused on closing the transaction."

Singtel placed Amobee under strategic review in May 2021. A year later on 27 May, Singtel said Amobee, a non-core business, was classified as a subsidiary held for sale in March this year.

Completion of the Amobee divestment is expected by September 2022 and is subject to the fulfilment of certain conditions under the Sale and Purchase Agreement, including the receipt of relevant regulatory approvals. Singtel bought over Amobee in 2012 for about US$288 million then. The Singapore telco said back then that the acquisition will "complement its existing advanced geo-localisation capabilities to help marketers better target its mobile subscribers in the region". 

According to the Wall Street Journal, Tremor currently has 900 employees globally. In 2020, it boosted its adtech capabilities by snapping up Unruly. A year later, it bought over global CTV video ad server and media management platform, Spearad, for US$14.7 million. Spearad founders Erhard Neumann and Mark Thielen joined the Tremor leadership team following the acquisition.

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