Cross Keys Capital Executive Summary US-based provider of mobile performance marketing

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Adjusted EBITDA Revenue Adjusted EBITDA Margin
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Employees
Employees (excl. Shareholder):
October 2015
-QUICK FACTS-
CONTACT CROSS KEYS
CAPITAL:
Rick Becker, Managing Director
O: (954) 779-3135
M: (954) 557-5037
rbecker@ckcap.com
Joshua Tohen, Associate
O: (754) 224-4287
M: (317) 418-9144
jtohen@ckcap.com
Southeast U.S.
2013
LLC
1 Shareholder
$10.0 MM
$1.7 MM
17.2 %
616%
8
OVERVIEW:
The Company is as mobile performance marketing network, which unlike traditional marketing where
fees are paid on retainer by the client, the Company’s clients only pay for action, such as cost per call,
cost per lead, cost per install or cost per sale. This performance model has enabled the Company to
win hundreds of clients in a very short time span. The clients pre-pay for the ad campaigns, while the
Company pays the publishers in it’s network as the ads perform, resulting in excellent free cash flow.
In connecting advertiser and publishers, the Company takes on little risk in the transaction. The
Company’s current solution is mobile cost per call traffic through thousands of publishers that utilize
locally targeted mobile ads. Those ads will incorporate a phone number for consumers to reach the
advertisers directly and the advertisers will pay a pre-negotiated rate for the call.
GROWTH OPPORTUNITIES:
Expand The Team: This relatively new industry is booming (14.72% Projected CAGR from 2015
to 2019 per Marchex 2015 Click-To-Call Commerce Mobile Performance Report). The Company
believes that there is significant revenue available within it’s existing client and publisher base and with
additional headcount will be able to access it much more effectively as well as expand it’s reach.
Expansion of Industry Verticals: The Company has been able to achieve significant growth by
utilizing an opportunistic test-and-learn strategy that focused them primarily on one vertical which
they have very successfully grown. A major opportunity exists to grow revenue in eight additional
verticals, of which the Company already has a material presence as well as incremental verticals
beyond that.
New Service Offerings: As of September 2015, the Company has recently rolled out Cost Per
Lead, Cost Per Install, Cost Per Sale marketing in addition to their leading Mobile Cost Per Call
service. These offerings vastly expand their available client targets and with their existing network and
technology, they believe they can quickly gain market share and expand overall revenue.
Stephen Ferber, Senior Advisor
O: (954) 385-4977
M: (954) 895-6377
sferber@crosskeyscapital.com
COMPANY HIGHLIGHTS
• Skilled Management Team
• Unique Performance Marketing Model
• Burgeoning New Industry Just Started in
2012
• Strong Relationships with Ad Publishers
• Low Capital Intensity
DESIRED TRANSACTION:
The sole Shareholder is seeking a debt free / cash free 80%/20% Majority Recapitalization of the
business. The Shareholder is an executive with a Fortune 500 publicly traded company where he is on
track for a C-Suite position and as such, wishes to focus his full attention on his career. He has
relatively zero involvement in the business, relying on a management team that is more than capable
of running and growing this business post-transaction.
ACQUISITION OPPORTUNITY:
U.S. Based Provider of Mobile Performance Marketing Services
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FINANCIAL SUMMARY
Apr - Dec 2013 2014A YTD Jun 2015 LTM Jun 2015 2015P 2016P
Revenue 194,936$ 2,364,225$ 5,421,639$ 7,370,152$ 9,997,502$ 12,996,753$
% Growth N/A 1112.8% N/A N/A 322.9% 30.0%
Gross Margin 23,411 856,580 1,511,659 2,159,875 2,929,838 3,808,790
Gross Margin % 12.0% 36.2% 27.9% 29.3% 29.3% 29.3%
Adjusted EBITDA (113,348) 444,114 955,597 1,251,151 1,722,348 2,391,757
Adjusted EBITDA Margin -58.1% 18.8% 17.6% 17.0% 17.2% 18.4%