Ad tech firm IZEA (NASDAQ:IZEA) rallied nearly 160% today after announcing that it has reached a definitive agreement to acquire TapInfluence in a part-cash, part-stock transaction.
IZEA will acquire TapInfluence through a merger agreement and TapInfluence will become a wholly owned subsidiary of IZEA upon closing. Total consideration for the transaction in cash and stock is estimated at $7.08 million based on IZEA’s yesterday’s closing price.
TapInfluence is a leading platform and online marketplace for brands and agencies to execute influencer marketing campaigns. The acquisition will augment IZEA’s software as a service customer base, and provide additional technology capabilities which will eventually be integrated into IZEAx.
IZEA CEO Ted Murphy commented, “We are bringing together two of the leading companies in the influencer marketing space, creating an influencer marketing offering that is unparalleled in the industry, and providing the critical mass necessary for making significant inroads on several fronts […] Our goal is to provide both marketers and influencers with the best possible experience. This combination will allow us to further enhance our technology, significantly increase marketplace liquidity, and provide incredible customer service. In addition to customer benefits, the efficiencies gained from consolidating our operations will also enhance our bottom line.”
Craig-Hallum analyst Mike Malouf recently wrote, “IZEA is solidifying its position as the leader in influencer marketing as new features in its revamped IZEAx platform are gaining traction with clients. Competition is high in the influencer marketing space, like other sectors in the AdTech and MarTech industries, as many small companies try to differentiate themselves and scale up. IZEA is facing headwinds from budget and investment changes with its large customers, and we have moderated our growth expectations as the company changes its sales strategy in response. IZEA’s stock, while volatile, has pulled back over 80% from its 52 week high and now represents over 100% upside to our price target. We are maintaining our Buy rating based on the attractive risk/reward at current valuations and keeping our price target at $5.50.” (To watch Malouf’s track record, click here)