Local Internet company Incubeta Holdings has bought South African online media company, Interface Holdings, in a deal worth R100 million, as part of its global expansion into the small and medium enterprise (SME) segment.
Incubeta Holdings owns global paid search specialist Clicks2Customers, while Interface Holdings (iFace) is an integrated online media company.
Clicks2Customers was founded in 2003 by Vinny Lingham, Charlene Lingham, Eric Edelstein and Llewelyn Claassens, to bring the searchers and the relevant advertisers together.
Clicks2Customers currently has clients and offices in the US, Australia, New Zealand, Singapore and Brazil. Its clients include travel and financial services brands in southern Africa.
iFace houses digital brands such as Webmail, which ranks in the top three domestic page impressions sites, according to the Digital Media and Marketing Association, formerly the OPA. It also owns EasyInfo and jobs4u.co.za, and has a 20% share of local online advertising spend.
“The deal is a natural progression for both companies, which have successfully worked together over the past two years. We see this as an opportunity to quickly expand our offering and our footprint into a lucrative and relatively untapped market,” says iFace CEO Alan Lipschitz.
New offering
A new division, Clicks2Local, has been created to offer search to the SME segment, especially in emerging regions. Incubeta CEO Jonathan Gluckman says buying iFace allows the company to roll out its new SME offering, which has been in research and development for three years.
In 2006, South African-based venture capital company, TEIM Ventures, and Southern Cross Capital invested in the company, and in early 2007, Mark Shuttleworth's Here be Dragons venture fund made a partial acquisition.
Gluckman says the deal is “one of many acquisitions we plan to make in this space over the coming months”. He explains the company is looking to grow its client base and acquire more skills through buyouts.
“We will be launching our Clicks2Local offering in South East Asia in November and rolling out quickly into other regions soon after that,” says Gluckman.
The deal has been structured as a part share, part cash transaction. It is expected to deliver combined profit exceeding any other digital group in South Africa. It also positions the company as one of the largest spenders and client bases in search, particularly on Google.
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