Hyderabad: Hyderabad-based digital marketing and advertising company Ybrant Technologies Ltd said it was close to buying a US search marketing firm for $100 million that will be its fifth and largest overseas acquisition.
The company did not reveal the name of the American firm or details of the acquisition due to non-disclosure agreements, but said it is a leading player in online search, and affiliate marketing.
“We have signed the letter of intent. The due diligence process is currently under way and we hope to close the deal soon,” said Ybrant managing director Suresh Reddy.
Since 2006, Ybrant has bought Oridian Inc. for $13.5 million, AdDynamix for $10 million, Medios One Llc. for $4 million, and VoloMP for $2.2 million.
To fund its latest acquisition, Ybrant has raised $30 million through private equity, the biggest chunk of which came from New York-based private equity and hedge fund Sansar Capital Management Llc., which has invested $20 million.
Ybrant said it also plans to enter China. “China is one of the emerging online advertising markets, and we would like to establish our presence there in the near future,” Reddy said.
Elaborating on Ybrant’s aggressive buys, Reddy said, “With our last four acquisitions, we were around 25% close to becoming an end-to-end online advertising solutions company.” With its latest acquisition, it has inched closer to it goal, the senior executive said.
The company is talking with a few private equity companies to raise more money and is working out different deals to partly fund the buy.
“We have paid off all our acquisitions so far and are currently debt-free. So, there is room for debt to fund this acquisition,” Reddy said.
Initially, Ybrant had planned to raise money through an initial public offering, or IPO, and had even filed a draft red herring prospectus with the market regulator Securities Exchange Board of India in September. However, when it found the IPO will not be able to entirely fund the $100 million buyout, the company shelved the plan, Reddy said.
In December, when Sansar Capital invested $20 million in Ybrant, the company was reported to be valued at $125 million.
The US market accounted for over 50% of the Rs108 crore revenue for the eight-year-old company on March 2007. Internet advertising spend in the US grew 28% in 2007 to touch $25 billion, says a 2008 report by research firm IDC.