ironSource Shares Soar After $400M Tapjoy Acquisition, Credit Suisse Rating

App Economy business platform ironSource Ltd IS agreed to acquire the mobile advertising and app monetization company Tapjoy, Inc for $400 million cash.
Tapjoy's technology powers monetization, user acquisition, and customer research for some of the world's largest brands and app developers, with SDK integrated on 66,000 apps reaching over 1.6 billion monthly active users.
The acquisition will strengthen the ironSource platform offering for mobile app and game developers.
Tapjoy will likely generate $81 million in net revenues in CY21. The transaction is accretive to ironSource in CY2022. It will likely close in Q421/Q122.
ironSource held $706.8 million in cash and equivalents as of June 30.
Analyst rating: Credit Suisse analyst Stephen Ju initiated coverage of ironSource with an Outperform rating and $16 price target, implying a 44.4% upside.
ironSource is a business software platform that enables mobile content creators to grow and monetize their apps, Ju notes.
Ju believes most of the company's revenue growth came from existing customer expansion versus new customer growth.
This trend will continue as its onboarded customer cohorts have grown and it invests in greater sales capacity and acquisitions.
Price Action: IS shares traded higher by 6.58% at $11.82 in the market session on the last check Thursday.