Raketech has acquired the data-driven affiliate network Lead Republik, in a deal worth €1.4 million.
As part of this deal, all of Lead Republik’s staff will join Raketech.
Non-Nordic profit rising
Lead Republik is registered in Malta and brings most of its revenue in from Canada, New Zealand and Germany. Through this acquisition, Raketech has announced that it expects its revenue outside of the Nordic region to rise to 20%.
Paid media forms a large part of the affiliate network’s revenue, and according to Raketech this will slightly lower EBIDTA margins for the group.
Oskar Mühlbach, Raketech Chief Executive, shared his thoughts on the company’s new partnership with Lead Republik. These were as follows.
“This acquisition is ticking a lot of strategic boxes, as it gives us further footprint in markets important for our key partners.
“We further see strong synergies when combining Lead Republik’s offering with our know-how, within organic search.
“I am furthermore really glad to have the brilliant Lead Republik team on board.”
Deal effective as of today
Raketech’s new partnership is effective as of today (March 11th). Mühlbach has also said that Lead Republik’s sellers will “continue their involvement for the next 12 months”. This is to “secure a smooth handover and accelerate expansion into further markets”.
Leadrepublik’s staff will now receive extra earn-out payments, depending on performance. Part of this earn-out is based on performance until 28th February 2021. This is capped at €0.3 million.
Another earn-out, based on performance up to the end of February 2022, is unrestricted.
Building on last year
Raketech released its 2019 financial report last month, in which it reported a year-on-year profit increase. This was despite revenue going down, due to new regulations in Sweden.
Total revenue up to 31st December 2019 reached €23.9 million, which was a 6.5% decrease on the €25.6 million generated in 2018. Meanwhile, operating costs went up by 23.6% – totalling €17.8 million.
Profit before tax went up by 54.2% to €7.4 million, despite lower revenue and higher operating costs having an adverse effect on operating profit.