REG - dotDigital Group plc - Dotdigital acquires Fresh Relevance

dotDigitalAnnouncement

06/09/2023 07:00

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RNS Number : 5426L  dotDigital Group plc  06 September 2023

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Dotdigital Group plc

("Dotdigital" or the "Group")

 

Dotdigital acquires Fresh Relevance

 

Acquisition of personalisation platform strengthens Dotdigital's CXDP offering

 

Dotdigital Group plc (AIM: DOTD), the leading SaaS provider of an all-in-one
customer experience and data platform (CXDP), is pleased to announce the
acquisition of Fresh Relevance Limited ("Fresh Relevance"), a vendor of
cross-channel personalisation technology ("the Acquisition").

 

Highlights:

 ·         Acquisition accelerates Dotdigital's CXDP roadmap, bringing highly
           complementary cross-channel personalisation and website technology together
           with technical expertise
 ·         Increases the Group's addressable market, enabling the acquisition of higher
           value customers and supporting customer retention by providing the means to
           expand its role in existing customers' technology stacks
 ·         Strong existing relationship between Dotdigital and Fresh Relevance, with
           established technology integration and shared values and culture
 ·         Expected to add over £6.0m of annual revenues, of which 93% are recurring
           SaaS revenue, and £0.6m annual EBITDA before integration costs
 ·         Revenue and cost synergies over the medium term and is expected to be earnings
           enhancing in the financial year ending 30 June 2025

 

About Fresh Relevance

 

Fresh Relevance was founded in 2013 and operates from its offices in London
and Southampton. The platform increases conversions and boosts revenues by
using data to personalise customer experiences across web, email, mobile app,
SMS and ads. Capabilities include triggered emails, product recommendations,
onsite popovers, dynamic content, behavioural and geotargeting, optimisation
and customer data management. Fresh Relevance has more than 300 customers
around the world spanning consumer and B2B ecommerce and travel. Customers
include Rip Curl, Dreams, Hoseasons and Wowcher.

 

Background to and Reasons for the Acquisition

 

The acquisition brings highly complementary personalisation technology and
website expertise to the Group, supporting marketers in delivering exceptional
customer experiences across all customer touchpoints. Personalisation is a
growing trend: 76% of consumers say they're more likely to purchase from
brands that personalise interactions(1), with websites often representing the
final gateway to customer conversion. This is reflected in the investment
choices of marketers, with one third of marketers spending 50% or more of
their budgets on personalisation(2) and two thirds of North American and
European eCommerce companies planning to invest more into it in the future(3).

 

Dotdigital and Fresh Relevance have a strong existing relationship and a
proven track record of joint success. Having worked together in a partnership
capacity for years, the two firms share a number of joint customers that
utilise the existing technology integration.

 

As part of Dotdigital, Fresh Relevance will operate under its existing
brand. The integration of Fresh Relevance into the Group will be overseen by
Dotdigital's newly appointed Chief Business Operations Officer, Helen Thomazin
(a non-Board position), and Fresh Relevance CEO and co-founder, Mike Austin,
who will join the Dotdigital leadership team (also non-Board).

 

As long-standing partners, Dotdigital and Fresh Relevance already have a level
of integration where the technology works hand-in-hand to deliver memorable
cross-channel experiences with hyper targeting and personalisation across all
stages of a customer's journey. Over the next 12 months, the Group will be
leveraging the functionality of the Fresh Relevance platform and integrating
this into the Dotdigital experience platform to enable a more seamless user
experience for customers as part of its vision of launching a differentiated
all-in-one CXDP. This will create a higher value proposition and provide
revenue expansion opportunities across both customer bases, as well as open up
substantial new, higher value customer acquisition opportunities. Dotdigital
will leverage Fresh Relevance's capabilities and experience specifically in
website journey orchestration, personalisation and optimisation, not just for
known identifiable customers but also the 95%-98% of visitors that are
anonymous.

 

Consideration

 

Dotdigital is paying a total consideration of £25.0 million, 100% payable on
completion, with c.£18.9 million being satisfied in cash and c.£6.1 million
by the issue of 6,862,683 new ordinary shares in Dotdigital at 88.698p, which
are subject to a 12 month lock-in.

 

The cash portion of the consideration will be funded through the Group's own
cash reserves.  Post Acquisition, the Group will have a cash balance of
£38.3m giving the flexibility to look at further strategic acquisition
opportunities.

 

The Acquisition will complete on admission of the equity shares to trading on
AIM.

 

Milan Patel, Chief Executive Officer of Dotdigital, commented:

 

"The acquisition of Fresh Relevance and its expertise in the realm of web
significantly enhances our personalisation capabilities and provides
opportunity for average revenue per user expansion. Its addition marks a leap
forward in our CXDP growth journey, bringing together customer insights,
cross-channel engagement, and on-site personalisation capabilities to provide
marketers with the tools to exert greater influence across the customer
journey.

 

Having worked together as partners for five years, we have been long-term
admirers of Fresh Relevance and its talented staff. Our cultural alignment
gives me confidence that customers old and new will reap the benefits of a
more comprehensive offering that extends beyond traditional marketing
channels.

 

On behalf of the Board and everyone at Dotdigital I would like to welcome
Fresh Relevance to the organisation. I look forward to working closely with
them to achieve our shared ambitions and drive increased value for the Group's
shareholders."

 

(1)McKinsey: The value of getting personalization right-or wrong-is
multiplying
(https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/the-value-of-getting-personalization-right-or-wrong-is-multiplying)

(2)Adobe: Study: Where is Personalization Missing the Mark?
(https://blog.adobe.com/en/publish/2020/05/27/where-is-personalization-missing-the-mark#:~:text=A%20parallel%20February%20survey%20by,increase%20that%20share%20this%20year)

(3)Statista: Share of e-commerce companies planning on investing more in
personalization in North America and Europe in 2021
(https://www.statista.com/statistics/1174164/investing-personalization-ecommerce-companies-worldwide/)

 

Admission

 

An application has been made for 6,862,683 new ordinary shares, to be issued
to satisfy the equity consideration for the Acquisition, to be admitted to
trading on AIM ("Admission"). Admission is expected to occur on 11 September
2023. Following Admission, the Company will have 306,078,813 ordinary shares
in issue admitted to trading on AIM, which figure may be used by shareholders
in the Company as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a change in
their interest in, the share capital of the Company under the FCA's Disclosure
and Transparency Rules. Of this total 660,000 ordinary shares are held in
treasury.

 

 

 

 Dotdigital Group Plc                                    Tel: 020 3953 3072

Milan Patel, CEO

Alistair Gurney, CFO                                   investorrelations@dotdigital.com

 Alma PR (Financial PR)                                  Tel: 020 3405 0210

 Hilary Buchanan                                         dotdigital@almapr.co.uk

 David Ison

 Kieran Breheny

 Canaccord Genuity (Nominated Advisor and Joint Broker)  Tel: 020 7523 8000

Bobbie Hilliam, Corporate Finance

 Jonathan Barr, Sales

 finnCap (Joint Broker)                                  Tel: 020 7220 0500

Jonny Franklin Adams, Corporate Finance

 Singer Capital Markets (Joint Broker)                   Tel: 020 7496 3000

Shaun Dobson, Corporate Finance

 Alex Bond, Corporate Finance

 

About Dotdigital

 

Dotdigital Group plc (AIM: DOTD) is a leading provider of cross-channel
marketing automation technology to marketing professionals. Dotdigital's
customer experience and data platform (CXDP) combines the power of automation
and AI to help businesses deliver hyper-relevant customer experiences at
scale. With Dotdigital, marketing teams can unify and enrich their customer
data, identify valuable customer segments, and deliver personalised
cross-channel customer journeys that result in engagements, conversions, and
loyalty.

 

Founded in 1999, Dotdigital is headquartered in London with offices in
Croydon, Manchester, New York, Melbourne, Sydney, Singapore, Cape Town, and
Warsaw. Dotdigital's solutions empower over 4,000 brands across 150 countries.

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