In a move that will consolidate two providers in the specialist media content management and process sector, Pilat Media, has agreed to an acquisition by SintecMedia and wholly owned subsidiary Sintec Media Software (SMS).
SintecMedia already owns c23% of Pilat Media shares and with the SMS entity it is making a cash offer for the business of 95 pence/share. This represents a 28.8% premium on the closing price prior to the offer, and values the deal at $63.3m. The offer is subject to shareholder approval but Pilat Media executives are recommending it. In its most recent reported quarter (Q3, to September 2013) Pilat Media had revenue of £6.3m and a meagre operating profit of £140k. SintecMedia, which has headquarters in Jerusalem, is privately owned so no financial details are available.
Pilat Media has had problems over the last couple of years with the cost of delivering its services and scaling its workforce to fulfil contracts (see the background here) resulting in a stop/go mode of performance. Referring to the reasons for the merger, the companies talk of a rapidly evolving marketing with new players and technologies but difficult challenges, and are looking to benefit from the increased scale of the new entity, which could suggest SintecMedia has found business hard too. Pilat Media needed to break its pattern of performance, with SintecMedia the new entity may be able to do that.