Silicon Valley mobile marketing startup AppLovin, said it agreed to be acquired by Chinese private equity firm Orient Hontai Capital, a unit of Orient Securities Co. Ltd (SHA: 600958) (HKG: 3958), in a deal valued at $1.4 billion.
Orient Securities and Citigroup Global Markets Asia Ltd., a unit of Citigroup Inc. (NYSE: C) are joint venture partners of Citi Orient Securities. Established in June 2012, Citi Orient undertakes Orient Securities’ investment banking business. It is headquartered in Shanghai and has representative offices in Beijing, Shenzhen and Xinjiang.
AppLovin was founded in 2011 by Adam Foroughi, Andrew Karam and John Krystynak. The startup has previously raised $4 million in angel investor funding from Eduardo Vivas, John Burbank and Webb Investment Network, an early stage fund founded by Maynard Webb, chairman of Yahoo! and board member at Salesforce, Visa and Everwise.
“Today is a great day for AppLovin,” said AppLovin co-founder and CEO, Adam Foroughi. This is the most sizeable outcome for a mobile advertising company ever.”
AppLovin is a mobile marketing platform that helps major brands reach consumers with relevant content reaching “over a billion mobile consumers every month,” it says. AppLovin has reportedly been profitable since its first year of operation, and the business is said to have more than doubled every year since launch. Advertisers are tracking to spend nearly half a billion dollars in 2016 on the AppLovin platform, the company says.
“AppLovin is the clear leader in mobile marketing automation and consistently delivers outstanding results for their customers. As the mobile market grows, AppLovin is well-positioned to herald new innovations and a standard of excellence,” said Tony Ma, CEO of Orient Hontai. “We are excited to work with the AppLovin team and apply our experiences to accelerate AppLovin’s growth and global market share.”
After the closing, AppLovin will continue its standard operations, maintaining its corporate headquarters in Palo Alto, Calif., and will retain its team of 100 employees.
The deal is subject to regulatory approvals and expected to close in the fourth quarter of 2016. CVCapital is serving as financial advisor to AppLovin, and Fenwick & West is serving as legal advisor.
Citi Orient Securities is serving as financial advisor to Orient Hontai, and Wilson Sonsini Goodrich & Rosati is serving as legal advisor.
Orient Hontai, via various funds under management, has participated in domestic and foreign equity investments focusing on media technology and healthcare sectors, including gaming companies such as Shanda Game, China Mobile Game Entertainment, and FunPlus Game.
Its parent, Orient Securities, founded in 1998, is a full service securities company with over 2,900 employees, whose business covers securities underwriting, proprietary trading, securities brokerage, investment advisory, financial advisory, mergers and acquisitions, and asset management.
Headquartered in Shanghai, the firm has 97 branches in 39 cities. In March 2015, Orient Securities launched its A-share IPO at the Shanghai Stock Exchange. In July 2016, Orient Securities raised $1 billion in a Hong Kong IPO.
Photo: Adam Foroughi, co-founder and CEO, AppLovin.