ZetaDisplay Acquires Dutch CMS Gauddi In Ongoing Digital Signage Consolidation Effort

October 10, 2019 by Dave Haynes

The Swedish firm ZetaDisplay is continuing to build its digital signage solutions company through acquisition, announcing today that it has paid about $5 million USD, in cash, to acquire the Dutch CMS software company Gauddi.

Malmo-based Zeta says the deal, effective today, makes it the primary player in the BeNeLux region. Eindhoven-based NDS might argue that point, but I noticed in the lengthy number of 16:9 posts about Zeta’s M&A activity it had already bought another Dutch company, QYN, two years ago. So maybe …

Zeta, a publicly traded firm on Nasdaq Stockholm, says Gauddi BV has net sales in 2018 of SEK 49 million (about $5M USD), recurring revenues (SaaS) of 41% and an EBITDA of SEK 8,2 million (~$1M USD). Rotterdam-based Gauddi has been mostly focused on Europe, but has a sales office in Baltimore, in efforts to crack the U.S. market.

Says the press release:

The transaction includes an upfront payment in cash of SEK 52,7 million and an additional performance consideration based on full year results for 2019 of up to SEK 18,4 million. The acquisition is financed through available cash. On a proforma basis, ZetaDisplay shows after the finalized acquisition annualized nets sales of SEK 488 million ($49.6M USD), an EBITDA of SEK 56 million and contracted services of SEK 143 million equaling to 29% of net sales.

“We are in a market with strong underlying growth where increased customer demands on international footprint and managing complex Digital Signage solutions trigger a consolidation. Gauddi represents a vital complement to our existing operations. We aim for a scalable integration and operation as we share similar software and a complementary customer base. This will create direct value to our customer base and enhance our market position,” says Per Mandorf, CEO and President of ZetaDisplay.

“We have a strong financial position as consequence of the recent launch of a bond loan of SEK 300 million and aim to strengthen our leading position on the European market, where further acquisitions are part of this strategy,” he adds.

“ZetaDisplay BV and Gauddi BV are two companies with unique and complementary offerings. Together we can develop into a full-service provider with an increased international presence. We can offer complete digital signage solutions in the forefront of technology to existing and new customers,” says Theo Wieckardt, CEO Gauddi BV.

Both top Gauddi exec, Wieckardt and Edo Sleutelberg, will remain working for the combined operations.

ZetaDisplay acquires all the shares in the deal, but a performance incentive has been tacked on, as well. If certain defined performance thresholds are achieved for the full year 2019, a maximum additional purchase price of approximately SEK 18,4 million could be paid. ZetaDisplay has the right to pay up to approximately SEK 10,8 million of the additional purchase price in the form of ordinary shares in ZetaDisplay AB.

This has all been happening in Europe and, apart from securities-required PR, somewhat quietly. I can’t recall ever seeing a ZetaDisplay stand at ISE or elsewhere (though the disjointed layout of ISE could easily make attendees miss things).

Most of the M&A work has been done to lock up the Scandinavian market, but this second deal in the Netherlands suggests Zeta has designs on the broader EU market. Longtime CEO Leif Liljebrunn stepped down from that role a few months ago to focus just on acquisitions.

The company had a caretaker CEO when Liljebrunn stepped back, but now Mandorf appears to be in place.