Maurice Lévy's Weborama makes play to outbid Amazon for Sizmek's assets
In an unusual turn of events, Weborama’s parent company, Ycor, said Friday that it’s outbid Amazon for Sizmek’s Ad Server and Dynamic Content Optimization assets.
Amazon signed an agreement to acquire Sizmek’s assets on May 31, but Ycor, which is owned by Publicis Groupe supervisory board chairman Maurice Lévy, says it still has a shot, as the deal with Amazon has yet to close.
Because Sizmek filed for bankruptcy on March 29, it has a “fiduciary duty to the creditors that they are getting the best possible deal they could get,” says Alain Lévy, CEO at Ycor and Weborama. “Until the process is over, you can bid.”
“If you read carefully, Amazon’s blog post does not say a deal has closed,” Lévy adds. “Their blog post even says, ‘Once the deal closes."
But Sizmek, in a statement, signaled it was committed to finalizing its deal with Amazon: “We’ve signed an agreement for Amazon to acquire Sizmek’s ad server and DCO assets and are seeking expeditious court approval of it. We are respectful of the court-supervised sale process and will provide more information to stakeholders when appropriate.”
Weborama is a 20-year-old ad tech company that’s mostly focused on the European market. Other than Google Ad Manager (formerly DoubleClick), Sizmek is the only other global ad server on the market. That might explain why Weborama, which does the bulk of its business in countries such as Russia and Italy, is interested in acquiring its parts.
Weborama’s move will likely prompt a bankruptcy judge to hear both bidding companies’ arguments; the judge would then decide who gets to purchase Sizmek’s ad server and DCO. Importantly, simply having the highest bid doesn’t mean that Weborama will win, as the judge may determine that Weboroama, for example, doesn’t have the funds to cover the deal, or, that Amazon might become too powerful should it win out.
Although Amazon has a near limitless budget to acquire Sizmek’s assets, doing so simply isn’t the company’s style, according to one person familiar with their dealings and who was also bidding on Sizmek. “Amazon builds its own tech so if the price is too high, they’ll walk,” the person said. “Its ad business is nothing in the grand scheme of things, so losing the Sizmek deal won’t affect its stock, not even in the slightest bit.”
Sizmek left its ad server, demand side platform and data management platform up for grabs after filing for bankruptcy on March 29. Sizmek was looking to capture between $50 million to $60 million for all its parts, but decided to offload the DSP and DMP to Zeta Capital for an estimated $36 million. Of the three businesses, the ad server was the only one that was profitable, as it generated between $75 million and $80 million last year, up nearly 10 percent year-over-year, the person familiar with Sizmek said.
Amazon declined to comment on Ycor's move.