Social Reality scores $25 mln, also buys Steel Media


Social Reality, a Los Angeles-based internet advertising firm, has received $25 million in funding. Victory Park Capital provided a $20 million credit facility while Siskey Capital and other previous backers provided $5 million in equity financing. Also, Social Reality has acquired Steel Media, a digital ad inventory provider. No financial terms were disclosed for this transaction. And, Social Reality has named Richard Steel as president and Chad Holsinger as chief revenue officer.

PRESS RELEASE

LOS ANGELES, Nov. 3, 2014 /PRNewswire/ — Social Reality, Inc. (OTCBB: SCRI), a leader in automated digital platform technology and social management software for Internet advertising, announced today the acquisition of Steel Media, a privately held company with $10 million in expected 2014 revenues and a 14-year track record of providing display, mobile, video and email advertising inventory to top consumer brands and ad agencies.

Social Reality also announced $25 million in committed financing – a $20 million credit facility provided by Victory Park Capital, a Chicago-based asset management firm focused on middle market debt and equity investments, and $5 million of new equity financing provided by Siskey Capital, LLC and other existing investors. Social Reality utilized a portion of the credit facility, together with the new equity in order to fund the acquisition of Steel Media, continue expansion of Social Reality’s SSP (supply-side platform) and DSP (demand side platform) offerings sold through its proprietary real-time bidding (RTB) exchange, and to provide a strong capital base for growth, working capital and general corporate purposes. Steel Media leadership has joined Social Reality as an integral part of the newly combined entity; Richard Steel has been named President, and Chad Holsinger will serve as Chief Revenue Officer of Social Reality. Social Reality’s CEO and Co-founder, Christopher Miglino, will continue to lead the company and will run the combined businesses.

“This strategic acquisition of Steel Media is an excellent fit for Social Reality, creating a powerful force in the digital advertising space. Together, our companies offer superior performance and technology for social data and Internet ad buy-and-sell solutions, delivered to agencies and brands by a seasoned and skilled digital sales team. The combined expertise of our two companies will further enhance the quality of our industry-leading technology and service, with faster delivery for our customers. We welcome the Steel Media team to Social Reality, and we look forward to executing on our combined strategic vision,” said Miglino. “We appreciate the tremendous support from Victory Park Capital as our new strategic financing partner, as well as that of our new and long-term financial partners, and we look forward to their contributions as we continue to grow our business. With the enhanced revenues and positive operating cash flow from this acquisition, combined with increased leverage and ability to reach into new markets, Social Reality is well-positioned for long-term growth.”

“Our team is excited to combine forces with Social Reality. Their SRAX technology platform is the go-to digital ad exchange in the industry. Expanding Steel Media’s product offerings for our customers will drive growth within the combined business,” said Steel. “We’re ready to make our mark, providing digital media solutions that are best-in-class, best-in-reach and best-in-speed. Our combined company now has strengths that span the complete digital spectrum.”

The company’s Social Reality Ad Exchange (SRAX) is an SSP that was launched in early 2013 in order to connect online publishers with demand partners and buyers through advanced programmatic technology and RTB integration. The SRAX platform has gained the reputation for making buying and selling of display, video, mobile and in-app advertising an easier and more efficient experience than other digital ad technologies. Its proprietary RTB management platform integrates social information to optimize client results from the DSP and SSP offerings. Social Reality’s GroupAd product offering is a complementary social management and tracking software focused on delivering brand advocacy and customer loyalty via an integrated dashboard, to launch, distribute and optimize social and digital media campaigns.

T.R. Winston & Company, LLC served as exclusive financial advisor to Social Reality in the acquisition of Steel Media, was sole lead arranger for the term loan financing, and served as agent for the equity financing. Social Reality’s legal advisors were Sidley Austin LLP and Pearlman Schneider LLP. Steel Media’s financial advisor for the transaction was Petsky Prunier Securities and its legal advisor was Lowenstein Sandler LLP. Victory Park Capital’s legal advisor was Katten Muchin Rosenman LLP.

About Social Reality
Founded in 2010, Los Angeles-based Social Reality, Inc. is an Internet advertising company that provides tools that automate the digital advertising market. The company has built technologies and leveraged partner technologies that service social media and the real-time bidding (RTB) markets. For more information, please visit www.socialreality.com www.srax.com www.groupad.com

About Steel Media
Founded in 1999, Steel Media provides digital ad inventory to all top ten ad agencies, by billing, in the U.S., along with 30 of the Fortune 100 companies, all of whom rely on Steel Media for digital advertising needs. Steel Media provides display, mobile, video and email ad inventory to both brands and ad agencies. The company has technologies in place to dramatically optimize online display, mobile, email and video campaigns in order to increase the effectiveness of client’s ad spends. Steel Media provides brands and ad agencies the ability to deploy, manage, and measure all their digital advertising campaigns in one place. For more information, please visit www.steelmediainc.com.

About Victory Park Capital
Victory Park Capital (VPC) is a privately held registered investment advisor dedicated to alternative investing through the management of private investment funds. As specialists in credit and private equity investments, VPC focuses on middle market companies across a diversified range of industries. Whether as a lender or a control investor, VPC seeks to identify opportunities where it believes the potential for reward outweighs the risks entailed. Founded in 2007, VPC is headquartered in Chicago with additional resources in Los Angeles, New York, San Francisco, Boston and London.

About Siskey Capital LLC
Siskey Capital LLC, is a private merchant bank based in Charlotte, North Carolina. The firm acts as financial partners in assisting emerging companies accomplish their near to long-term goals. Siskey Capital’s participation in any opportunity is primarily partnership driven, using its own capital, while providing extensive financial, structural, growth and risk management expertise. Its founders and principals are strong goal oriented experts that have over three decades of successful merchant banking, venture capital, international business and entrepreneurial backgrounds.