Video search engine blinkx to buy Burst Media
Deal worth $30m for online advertising services company expected to add revenues of $34m
Video search engine blinkx has made its first major acquisition in a $30m (£18.3m) deal to buy online advertising services company Burst Media.
blinkx, which is built on technology developed at Cambridge University, said the deal, that includes cash and shares components, will add revenues of $33m to $34m.
The company also provided a trading update for the year to 31 March with revenues of about $65m which is up more than 90% year on year, and ahead of analyst expectations, with operating profit expected to hit $6.7m.
blinkx said the “majority” of Burst’s senior management team will remain with the business. However, co-founders Jarvis Coffin and David Stein will leave the company having taken “temporary roles to assist transition”.
The company had $52.8m in cash at 31 March with the cash component of the deal not expected to exceed $4.5m.
blinkx said the deal will combine blinkx’s 35m hours of online video and TV content with a mass audience of 130 million unique users through Burst’s operation.
“Up until now, the primary barrier to further television advertising budgets moving online has been online video’s inability to match the sheer scale of audience that television can deliver,” said blinkx chief executive Suranga Chandratillake. “We are extremely excited about the acquisition as it will allow us to overcome that challenge ... we will have the potential to create personalised, online television that is watched by hundreds of millions of users.”
Earlier this year AOL Europe acquired European online video distribution network GoViral, which operates in the same sector as blinkx, for $96.7m (£60.78m).