(Adds details, comments)
By Rujun Shen and Rachel Armstrong
SINGAPORE, June 11 Singapore Telecommunications
Ltd, Southeast Asia's largest telecommunications
operator, said on Wednesday it would buy two digital advertisers
for a total of $359 million, eager to achieve profitability for
the business through expansion.
The move follows purchases of digital marketing firm Amobee,
Inc. in 2012, which in turn bought mobile advertising and
marketing platform developer Grandient X Inc. last year, as the
global mobile advertising market takes off with surging use of
"We believe that in order to take Amobee to the next level
in this space we needed to make a transformative acquisition
that would allow the company to increase its scale, its scope,"
said Allen Lew, chief executive officer for Group Digital L!fe
of SingTel and chairman of Amobee.
"The big opportunity for us is in the emerging markets where
the fixed Internet has very low penetration and the mobile
Internet is going to change the game."
Amobee, now a wholly-owned subsidiary of SingTel, agreed to
acquire the entire stake of Adconion Direct North America and
Adconion Australia for $209 million, and Kontera Technologies,
Inc., for $150 million, SingTel said in a statement.
SingTel will also provide up to $20 million and $5.8 million
respectively, to each company to retain key staff. The
transactions are subject to fulfilments of certain conditions,
In the financial year ended March 31, revenue from mobile
advertising, mainly from Amobee, more than doubled on the year
to S$113 million ($90.42 million), contributing to the bulk of
revenue growth in SingTel's digital business.
Lew said he expects Amobee's revenue to exceed $300 million
after the acquisitions.
Amobee is running at a loss, and expansion is key for the
company to reach profitability. Growth units like Amobee is
expected to start contributing to the bottom line in three to
five years, he added.
Adconion has operations primarily in the United States and
Australia, and reported a revenue of $185 million for the 2013
U.S.-based Kontera Inc, a digital content intelligence and
marketing technology company, reported a revenue of $26 million
for the 2013 financial year.
($1 = 1.2497 Singapore Dollars)
(Editing by Subhranshu Sahu)