News & Insights

  1. News & Insights
  2. /
  3. Technology
  4. /
  5. Post-Close Interview: Inside the Sale of Managed Chaos to Digital Media Solutions

Post-Close Interview: Inside the Sale of Managed Chaos to Digital Media Solutions

by | Oct 15, 2020 | Articles, Business Services, Technology


Denver, Colorado (October 15, 2020): A couple months ago, The Forbes M+A Group celebrated the successful sale of Managed Chaos to Digital Media Solutions [(NYSE:DMS)], a leading provider of technology and digital performance marketing solutions. ManagedChaos represents the holding company for a one-of-a-kind performance and affiliate marketing platform, comprised of four synergistic companies: (i) SmarterChaos, a premier digital marketing and online performance management agency; (ii) She Is Media, a female-centric performance ad network; (iii)Dealtaker, an online marketplace and coupon site for consumers; and (iv) Elite Media Partners, an affiliate marketing agency.

Lead advisors, Dan Pellegrino (Managing Director/Partner) and Blake Shear (Director) walk us through the process of a deal, the obstacles they faced along the way, and the success they found with the right companies.

What was the role of The Forbes M+A Group within this deal?

Dan Pellegrino: “Forbes was selected as the exclusive Investment Banking Advisor to partner with Managed Chaos on the deal. That means we advised our clients on most aspects of the business terms and deal structure. We managed the process while also strategizing and negotiating on their behalf.”

Blake Shear: “We worked closely with management to craft a compelling story and operational model that could be presented to institutional investors. Key for investors to understand was exactly how all the “pieces” fit into the broader ecosystem and where each of the entities in the roll up would add value to an overall platform to generate the most value in the market.”

What is your role within the company and background within Investment Banking?

Dan Pellegrino: “I am a Partner and Managing Director with The Forbes M+A Group. I started my career in Management Consulting helping companies make strategic growth decisions, including acquisitions before I went off on my own to start three different companies.  I sold two of those companies; an e-commerce business and a white label digital agency. Although my software company failed, I believe those experiences help me to better relate to my clients and ultimately add more value when working on these long complex transactions. I’ve been doing dedicated transactional work in my current role for about 13 years now.”

Blake Shear: “I am a Director at the firm. As a co-lead on the deal, I focus on helping our clients understand the M&A process, help conceive the story, communicate to the market, and lead the negotiation with the buyer. I’ve been in investment banking for over 15 years. Prior to Forbes, I worked in the middle market as an advisor on both healthy and distressed transactions as well as cross border and domestic deals.”

What are trends you are seeing within the Advertising/Marketing industry, specifically within M&A?

Dan Pellegrino: “One big, recent, driver in the industry is the ability to obtain and use clean and consensual deterministic data for marketing purposes. This will ultimately lead to consolidation because most smaller companies will realize they need to be part of a larger organization to survive the coming privacy changes.”

Blake Shear: “The ability to use technology and data to show attribution for marketing dollars to drive measurable results for clients is becoming more important than ever. Buyers are looking for companies who have the technology and/or expertise in a certain niche of marketing as targets for acquisitions.”

What was unique about this transaction?

Dan Pellegrino: “It’s pretty unique to do a deal that involves multiple companies coming together like this. We always say that 1+1 =3 in the M&A world and  there is an arbitrage that can benefit the seller in a roll up like this  However, it is difficult to get one deal across the finish line, let alone four.”

Blake Shear: “Our client was being acquired ahead of a large SPAC going public, which created a lot of challenging issues that we had to work through. For one, the timing of this deal was critical to the deal as it had to line up with the SPAC’s IPO plans. It also created negotiation challenges because the structure of SPAC limited its ability to consider certain options, so ultimately we had a lot to build consensus between the two parties to get everyone working together in a collaborative way to get the deal done in time and at a premium valuation.“

What is a SPAC? Are SPACs the new IPO?

Dan Pellegrino: “They used to be known as reverse mergers, and they seem to be gaining in popularity again. Essentially, a SPAC, or Special Purpose Acquisition Company, is formed to raise money through an IPO to make acquisitions. The money is held in a trust account until released to fund the business combination or used to redeem shares sold in the IPO. The benefit of a SPAC over a regular IPO is typicallybecause the SPAC transaction is a little simpler and less time consuming than its counterpart.”

Blake Shear: “A special purpose acquisition company, which in theory, a blank check to make for an entity to make acquisitions. Once an acquisition is completed, the SPAC will go public on an exchange. We are seeing SPACs growing in popularity and they are emerging as a new category of buyer.”

What is a roll up? What is the best way for companies to think of a roll up?

Dan Pellegrino: “The best way to do a roll up is to start with, what we call a platform company. Once you have a solid, well-managed platform, the next step is to find a target, ‘add-on’, companies that you believe add synergies to the combined entities.  As a business gets larger and more operationalized, the risk perceptions get lower and the multiples will go up.  This is the 1+1=3 scenario.  Most Private Equity groups follow this recipe and it works well.”

Blake Shear: “It’s very hard to get a bunch of companies to agree at the same time to be acquired. We would recommend that one company serve as a platform and begin rolling up companies one at a time once integrated, go to look for additional targets.”

What kind of advertising/marketing companies are attractive to buyers?

Dan Pellegrino: “Old school, full service, agency model has become somewhat commoditized, so there needs to be a unique service offering such as a focus on a certain niche, a data play, or a technology-enabled service provider that is proven to drive value.  High growth and large margins will be the “proof in the pudding” so to speak.”

Blake Shear: “Companies that leverage technology, have long term relationships in specific sectors, as well as a diversified group of customers. Customer concentration can dramatically change the valuation.”


Media Contact: Sara Cody | 303.558.1462 |

For more information on M+A transactions and industry insights, read our blogs.