Magnite said it agreed to acquire SpotX from RTL Group for $1.17 billion in cash and stock.
The combined companies will be a big player in the fast-growing programmatic connected TV marketplace. Combined, CTV net revenue would have been $42 million in the fourth quarter of 2020, up 34% from the third quarter, and represents 67% of their combined fourth quarter net revenue.
“Sellers have been looking for a scaled independent alternative to the giant companies who dominate the CTV marketplace,” said Michael Barrett, president & CEO, Magnite. “The combination of Magnite and SpotX will make this a reality by bringing together the best CTV technologies and teams at a critical time. Ad-supported CTV is just beginning to draw budgets from linear TV and we will be well-positioned to participate in the strongest segment of industry growth for the foreseeable future.
In a blog post, Barrett said he expects the deal to close in the second quarter.
Magnite was formed last year when Rubicon Project merged with Telaria.
Together, Magnite and SpotX will serve some of the world’s leading programmers, broadcasters, platforms and device manufacturers, including A+E Networks, Crackle Plus, The CW Network, Discovery, Disney/Hulu, Electronic Arts, Fox Corporation, fuboTV, Microsoft, Newsy, Philo TV, Pluto TV, Roku, Samsung, Sling TV, Tubi, ViacomCBS, Vizio, Vudu, WarnerMedia and Xumo.
Magnite expects to be able to cut $35 million in run-rate operating costs through synergies, with half the reductions happening in the first year of combined operation.
“As CTV flourishes and the media industry continues to turn to programmatic, there is a huge opportunity for an independent scaled company to offer the single most comprehensive technology in the market,” said Mike Shehan, co-founder and CEO, SpotX. “We built SpotX with the mission of becoming the leading global video advertising platform, and our goal is now coming to fruition with Magnite. I am thrilled about what we will achieve together.”
“We are excited about the combination of SpotX and Magnite, two leading CTV advertising providers," said Thomas Rabe, CEO of RTL Group. "This transaction allows for significant value creation and upside potential for the parties, sellers and advertisers in the growing CTV market. We look forward to participating in the future success of SpotX and Magnite as shareholders in the combined entity."
The deal calls for Magnite to pay $560 million in cash and $14 million shares of Magnite stock.
Magnite will discuss additional details about the transaction when it reports fourt-quarter results on Feb. 24.
Prelimiary results have Magnite’s net income of $5.8 million on a 69% increase in revenue to $82 million. Proforma CTV revenue was up 53% to $15.3 million.
The smarter way to stay on top of broadcasting and cable industry. Sign up below.
Thank you for signing up to Broadcasting & Cable. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.