Jaywing PLC on Friday said it has bought marketing software development firm Midisi Ltd, which owns the intellectual property rights for Jaywing’s artificial intelligence software Decision.

Jaywing is a Sheffield-based data-driven advertising and marketing agency.

Jaywing will pay Midisi a first payment of £400,000 plus several extras over time.

York-based Midisi will receive excess cash of £845,230, a further fixed total payment of £1.4 million at six-monthly intervals over 42 months and performance-related earn-out payables from Jaywing.

The payables will be capped at £3.2 million and paid between months 13 and 49 following the acquisition. They relate to the performance of Decision, a software which until Friday was owned by Midisi but sold by Jaywing under a licence agreement.

Jaywing expects Decision to incrementally contribute £5.7 million revenue over 42 months, which ‘would generate earn-out payments totalling £1.7 million’ to Midisi, Jaywing stated.

Jaywing describes Decision as an ‘artificial intelligence solution for online marketing activity that Jaywing currently sells to certain clients which enables them to automate pay-per-click advertising management. Decision is a fully automated and self-learning tool that adapts to market supply and demand in near real-time.’

For its financial year ended April 30, Midisi reported a pretax profit of £231,849.

‘Digital marketing has now overtaken all other forms of marketing spend in the UK, and this acquisition enables Jaywing to significantly enhance its automation and use of artificial intelligence, which gives us a strong advantage in this market. The acquisition will be earnings-enhancing from the outset, with the removal of the existing licence fee arrangement, and offers huge potential for accelerating growth over the next few years,’ said Jaywing Chief Executive Andrew Fryatt.

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