Appia, a provider of mobile user acquisition services with an international customer base, is being sold to California-based Mandalay Digital for $100 million in a stock deal.
The deal is among friends. Both companies already are business partners.
Appia will see its name changed to Digital Tribune.
It’s the second “exit” for Appia founder Jud Bowman, one of the best-known entrepreneurs in the Triangle’s growing startup community. He was part of the founding team at Motricity, which went public. Bowman left Motricity, buying its smartphone apps business, to found Appia as PocketGear in 2008. The name was changed to Appia in 2011.
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Investors in Appia include Wakefield Group, Noro-Moseley partners, Trident Ventures, Tomorrow Ventures and BlackBerry Partners. Wakefield has backed Bowman for years dating back to his first startup (Pinpoint) that he launched while a high school student.
The Mandalay deal was announced Thursday after the markets closed.
“Together with Appia, Digital Turbine will offer a complete end-to-end solution for carriers and OEMS enabling them to get the right apps to the right user at the right time,” Mandalay said.
Mandalay helps customers monetize mobile content, games, payment, commerce, music, streaming and eBook applications.
As a result of the deal,Appia investors and shareholders will own approximately one third of the company.
“As a key Mandalay Digital partner, we have been amazed at the revenue per device metrics from Mandalay’s recent operator launches, including Verizon, and could not be more excited to join forces,” said Bowman, who is Appia’s CEO, in the announcement.
“Appia’s global reach, industry leading technology and scale, and unparalleled network of advertisers and publishers make us a critical component of Digital Turbine’s end-to-end app install platform for operators, OEMs [original equipment manufacturers], and advertisers.”
Mandalay trades on the Nasdaq under the symbol MNDL.
Appia shareholders will receive stock with $4.50 a share. Mandalay will assume Appia debt, which will be subtracted from the $100 million total.
Mandalay estimates that Appia backers will receive some 19 million shares worth some $85 million.
The shares are at a near 30 percent premium above Mandalay’s closing share price of $3.40 as of Nov. 12.
The boards of directors at both firms have already approved the deal. It is expected to close in January.
“This combination is transformational for Mandalay Digital, and will enhance the combined company’s competitive positioning by delivering a superior revenue opportunity for operator and OEM customers,” said Mandalay CEO Steve Stone.
“Appia’s platform fits hand-in-glove with Digital Turbine’s app installations, creating a single marketplace that we are confident expands our global reach, accelerates our growth, and creates a scalable, low-capex business model that will drive incremental EBITDA and free cash flow.”
Appia generated some $30 million in revenue this year through Sept. 30.
Some work force reductions can be anticipated.
Mandalay said it had identified some $2 million in “duplicative corporate headcount” and other expenditures.