- Upland Software, a leader in cloud-based enterprise work management software, announced recently that it is acquiring Localytics for $67.7 million in cash at closing
Upland Software, a leader in cloud-based enterprise work management software, announced recently that it is acquiring Localytics for $67.7 million in cash at closing, paid out of cash on hand and a $0.3 million cash holdback payable in 12 months (subject to indemnification claims).
Localytics is a leading provider of mobile app personalization and analytics solutions. And with Localytics, Upland’s Customer Experience Management (CXM) Cloud enables rich mobile experiences, personalization, and real-time sentiment analysis across every digital channel, including text, mobile app, browser, wallet, voice, and email.
And Localytics is known for giving brands the data, intelligence, and marketing channels to deliver a meaningful and personal customer experience. And Localytics helps brands discover and deliver exactly what their customers are passionate about, and integrate those insights and experiences across other channels to deliver a digital customer experience that resonates. Plus the Localytics platform is used in more than 37,000 apps on more than 2.7 billion devices by companies like ESPN, Fox and The New York Times.
This acquisition adds about $20 million in annualized revenues and will be immediately accretive to Upland’s Adjusted EBITDA per share.
“It is now vital for brands to deliver seamless, highly-personalized, mobile-focused experiences at key customer touchpoints. The addition of Localytics to our CXM Cloud offering now allows us to offer sophisticated mobile personalization at scale,” said Upland Software chairman and CEO Jack McDonald. “Our acquisition pipeline remains robust, and we are actively pursuing additional opportunities to build out our cloud offerings.”
Known as a pioneer in mobile application analytics, Localytics delivers deep insights into consumer behavior within mobile app experiences and provides the foundation for campaigns that convert better and drive customer loyalty. And Localytics’ support for interactions with consumers across push, in-app, inbox, and remarketing combined with rich audience segmentation allows marketers to deliver personalized app experiences with high consumer relevance.
“Our CXM Cloud team is on a mission to give our customers the technology and insights to deliver experiences consumers want and value. Localytics’ technology and expertise are powering app experiences that convert at a consistently higher rate across key consumer verticals like telco, media, retail, and consumer finance,” added Jed Alpert, executive vice president and general manager of the CXM Cloud at Upland Software. “Localytics is a perfect addition to our CXM Cloud, the only mobile-focused platform that harnesses the power of messaging, apps, email, and web interactions to serve today’s consumer on their digital channels of choice.”
The technology from Localytics’ mobile app marketing solution will be used to expand to more consumer touchpoints and upgrade the insights about consumer behavior and preferences that CXM customers receive today. And innovative mobile application capabilities like geo-based push, in-app notifications, and application inbox messaging — combined with behavioral data like application usage, location, products viewed, and cart abandonment — will allow Upland CXM Cloud customers to tune their mobile app experiences to drive better offer conversion and reduce the churn across targeted audiences.
Plus the connection to other marketing channels such as email and web will allow Upland CXM Cloud customers to not only manage the journeys across technologies but also choose the communication channels that are the most cost-effective for their businesses.
Upland is expecting the acquisition to generate annual revenue of approximately $20.0 million, of which $19.2 million is recurring subject to reductions for deferred revenue discount as a result of GAAP purchase accounting, estimated at $4.5 million for the remainder of 2020. And the price paid for the acquisition is within Upland’s target range of 5-8x pro forma Adjusted EBITDA and Localytics will generate at least $9 million in Adjusted EBITDA annually once fully integrated. And the acquisition will be immediately accretive to Upland’s Adjusted EBITDA per share.
Recently, Upland named enterprise software veteran Rod Favaron as the company’s president and chief commercial officer. And the company is planning to aggressively hire in marketing, sales, and customer success.
Earlier this month, Upland reported that total revenue is expected to be in the range of $62.8 million to $65.8 million including recurring revenue in the range of $58.8 million to $61.2 million, for growth in recurring revenue of 33% at the mid-point over the quarter ended March 31, 2019.
And Adjusted EBITDA is expected to be in the range of $23.1 million to $24.5 million for an Adjusted EBITDA margin of 37% at the mid-point, representing growth of 34% at the mid-point over the quarter ended March 31, 2019.
For the full year ending December 31, 2020, Upland expects reported total revenue to be between $269.5 and $281.5 million, including subscription and support revenue between $252.6 and $262.2 million for growth in recurring revenue of 26% at the mid-point over the year ended December 31, 2019. And Adjusted EBITDA is expected to be between $99.2 and $104.8 million, for an Adjusted EBITDA margin of roughly 37% at the midpoint, representing growth of 25% at the mid-point over the year ended December 31, 2019.