Local.com Corp. (NASDAQ:LOCM) said Thursday that it has agreed to buy the assets of OCTANE360, a provider of domain-based local advertising services to small businesses. Local.com is paying $5 million in cash and stock with an earnout of up to $5.9 million if certain performance criteria are met in the two-year period following the closing. At the same time, Local.com said it had closed a $30 million revolving credit facility with Silicon Valley Bank. Local.com, of Irvine, Calif., operates a local search site and network.
Local.com Corp., a leading local search site and network, today announced the acquisition of the assets of OCTANE360 (http://www.octane360.com/), a technology startup providing domain-based local advertising solutions to small businesses, domain portfolio owners, agencies and channel partners.
Under the terms of the agreement, Local.com acquired the assets of OCTANE360 for $5 million in cash and stock with an earnout of up to $5.9 million if certain performance criteria are met in the two-year period following the closing. Founded in 2008 and based in Los Angeles, California, OCTANE360 will become a wholly-owned division of Local.com.
“This transaction represents a significant expansion of Local.com’s product suite and technology platform, allowing us to manage the scaled acquisition, creation and deployment of geo-category targeted small business domains,” said Heath Clarke, Local.com chairman and CEO. “Furthermore, Octane Experts’ content marketplace allows for the scaled procurement of proprietary, curated content, thereby enhancing the SEO value of local domains under our management.”
OCTANE360 is a scalable, patent-pending technology platform, which can be used to offer the following services to small businesses, agencies, domain portfolios and channel sales partners on a direct, wholesale or private label basis:
Large scale targeting and registration of geo-category based local website domains – See examples here: http://www.octane360.com/case-studies-and-links.
Small business and geo-category website creation, hosting and management
An ad exchange to manage the selection and deployment of ad inventory across all Local.com Owned & Operated and Network sites, as well as third-party and directly owned domain portfolio properties
A content marketplace to allow for the management of geo-category content written for advertising customers or Local.com’s directly owned portfolio properties
OCTANE360 will be managed within the company’s Sales & Ad Services business unit, and its products and services will be utilized by the company’s Owned & Operated (“O&O”) and Network business units. Adam Rioux, OCTANE360’s CEO, will become Local.com’s vice president, leading the OCTANE360 division.
Local.com anticipates that the deployment of content across proprietary geo-category local domains will result in an increase in organic O&O traffic, a strategic objective of the company. The company also expects that the OCTANE360 product suite will open the domain portfolio industry as a potentially valuable new market for the Local.com network. OCTANE360 currently generates revenues from various ad formats including subscription advertising, performance and display ad units.
“We are excited to join forces with Local.com,” said Rioux. “We feel that our combined assets of platform, products, services, reach and relationships create a compelling offering to serve the growing local search market. We look forward to becoming part of the Local.com team while quickly ramping our business.”
The company also announced the closing of a $30 million revolving credit facility with Silicon Valley Bank. The facility, which is secured by all of the company’s assets, is expected to be used primarily for general working capital and to fund strategic growth initiatives.
“We are pleased to continue our relationship with Silicon Valley Bank,” said Brenda Agius, Local.com CFO. “This facility can be used to fund our strategic growth initiatives while enabling us to transact complementary traffic, technology and advertiser businesses.”