08/13/2014 | In the News
Ironwood Capital Portfolio Company Delivery Agent Seeks More Deals, Weighs IPO. (The Deal Pipeline)
Delivery Agent Inc. will turn its attention overseas as it looks to build on the recently announced acquisition of Musictoday LLC with further dealmaking and continue toward a potential initial public offering.
“We have a very aggressive growth vision for the company,” Delivery Agent chief executive Mike Fitzsimmons said, adding that while the San Francisco interactive technology company will be focused, near-term, on integrating its newest acquisition, it is looking outside the U.S. for its next deal, which he said he hopes to seal within the next three years. The company is evaluating acquisition opportunities in Germany and Japan, he explained.
Delivery Agent made its first deal in about four years on Aug. 5 by agreeing to acquire Musictoday from Live Nation Entertainment Inc.
Delivery Agent previously acquired media advertising company Band Inc. and fashion house Billion Dollar Babes Inc. in 2010.
After entering a partnership about two years ago, Delivery Agent and Live Nation began holding serious conversations about a potential deal last December, Fitzsimmons explained: “As we looked to expansion opportunities, we quickly came to the conclusion that [the] music industry has very similar traits as [the] television industry.”
While he declined to disclose financial terms of the deal, he did say it was a “pretty big transaction” for his company.
Founded in 2001, Delivery Agent builds technology platforms that allow viewers to purchase items they see on television shows via Web, mobile or TV and works closely with media networks and advertisers to provide such commerce services. For instance, it partnered with H&M Hennes & Mauritz AB in 2014 by producing a platform for the retailer’s 30-second Super Bowl advertisement that allowed viewers to purchase items from the David Beckham Bodywear collection through their remote control.
Fitzsimmons declined to provide financial information for Delivery Agent, other than it has 375 employees and more than 1,000 clients.
He also declined to comment on media reports from December that Delivery Agent was planning an IPO in the first half of 2014, but he did say a market debut is an option for the company. “We will consider it,” Fitzsimmons said. “We’ve got a lot of market opportunity and a tremendous amount [of opportunities] ahead of us.”
The company received $5 million from Samsung Venture Investment Corp. in late 2012, almost three years after securing $25 million from a group of seven investors: Focus Ventures, T-Venture Holding GmbH, Coral Group, Ironwood Capital Ltd., Bessemer Venture Partners, Worldview Technology Partners Inc. and Cardinal Venture Capital. The latter three were existing investors.
In announcing its 2012 funding, Delivery Agent said it had received total investments of $60 million.
Tristan Snyder, vice president of Intrepid Investment Bankers LLC, said Delivery Agent is probably one of the largest players in what he said was a relatively new space growing in popularity as companies continue searching for ways to engage users and potential purchasers in real time.
Explaining that there would be more acquisitions in the sphere, he said Delivery Agent could be at the forefront of the wave of deals and that it could be an appealing IPO candidate.
Delivery Agent has sealed a number of acquisitions in a short period of time, explained Snyder, whose investment bank sold media analytics company Trendrr to Twitter Inc. last year.
“They’re probably one of the first movers,” he said.
Snyder, however, said Delivery Agent also could garner interest from the likes of Amazon.com Inc. and Facebook Inc. if the company decided to exit the business. Amazon is engaged “in the commerce side of the equation,” while Facebook would get “more eyeballs and … more advertising dollars” if it added Delivery Agent to its portfolio, he said.
Amazon has a market capitalization of about $151 billion, and Facebook has one of $192 billion.
Even the CNET Networks Inc. unit of CBS Corp. could emerge as an appropriate fit for Delivery Agent, as it is immersed in consumer engagement, he said. CNET picked up Something Now Inc., where Fitzsimmons worked before launching Delivery Agent.
An IPO would take longer, as the company is likely to make more acquisitions to scale the business before filing for a debut. Still, “it’s an attractive candidate for both” routes, he explained.
Delivery Agent is a player that is in a “sweet point in the market,” added Frank Hawkins, partner at Scalar Media Partners LLC, a consulting firm to the media and sports industries. He said television is becoming a tool more people are seeking to use with interactive devices and companion devices — a practice known as second-screen engagement.
“You get a better response for advertising that is interactively enabled or enabled where they buy quickly. And that’s what [Delivery Agent is] good at,” Hawkins said.
Interview originally appeared in The Deal Pipeline, by Jaewon Kang, Aug-14-2014 ET featured on intrepidib.com
