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Taboola jumps 45% after Yahoo enters commercial pact, takes stake (update)

Update 12:20pm: Updates shares.

  • Taboola (NASDAQ:TBLA) surged 45% after the digital advertising firm entered into 30-year exclusive agreement with Yahoo.
  • Under the partnership, which is expected to generate $1 billion in annual revenue, Taboola (TBLA) will power native advertising exclusively across Yahoo's digital properties, according to a statement on Monday. Yahoo will take a 25% stake in Taboola and will add one representative on the company's board.
  • The agreement is expected to close in the Q1 of next year. Taboola (TBLA) will hold a special meeting of shareholders on Dec. 30 to seek holder approval for the deal.
  • The agreement is expected to be "highly" accretive to Taboola (TBLA) revenue, adj. EBITDA and free cash flow.
  • LionTree, which is a co-investor in Yahoo, served as financial advisor to the transaction. Evercore served as advisor to Yahoo. LUMA Partners also served as an advisor.
  • Earlier this month Taboola (TBLA) announced a new partnership with BuzzFeed to provide ads and content recommendations on BuzzFeed's premium websites.