Sell-side advertising platform Magnite has closed its previously-announced acquisition of US ad-tech company SpotX from RTL Group, creating what it says is the largest independent CTV and video advertising platform, and reinforcing the company’s capabilities as linear TV budgets increasingly shift to digital.
According to Magnite, buyers and sellers have long wanted a scaled, independent alternative to the giants that currently dominate the CTV marketplace, and suggests the combination of Magnite and SpotX makes this a reality, and better positions the company to help its clients grow their businesses across CTV and all other formats including video, display, and audio.
“Scale and reaching the largest possible audience is the name of the game when attracting the demand our CTV and video clients need,” stated Michael Barrett, President & CEO of Magnite. “Acquiring SpotX positions us to become the world’s largest, independent source of highly-coveted CTV and video inventory. Two-thirds of our revenue is now concentrated in the fastest-growing segments of the market, and as linear TV dollars move to CTV, the greatest opportunity is still ahead of us.”
“We’re thrilled to become a part of the Magnite family. CTV viewership and the ecosystem around it continues to evolve with new streaming services popping up every day and advertisers hoping to connect with those audiences,” said Mike Shehan, Co-Founder and CEO at SpotX. “SpotX’s CTV business has experienced significant growth over the past year, and we believe our performance will only accelerate through this combination of resources by delivering even more value to our clients.”
Magnite says it has the financial resources, technical capabilities, and teams to accelerate R&D and deliver products and services that make it easier for programmers, broadcasters, platforms and device manufacturers to monetise their inventory. The combined company’s clients now include A+E Networks, AMC Networks, Crackle, Discovery, FOX, fuboTV, LG, Roku, Samsung, Sling TV and Vizio.
The final purchase price of the transaction consists of $640 million in cash and 12,374,315 shares of Magnite stock, resulting in a total purchase price of approximately $1.14 billion (€942m) based on the closing stock price on April 29th.
RTL Group acquired a 65 per cent majority shareholding in SpotX for €107 million in 2014, and took full ownership of SpotX in 2017, acquiring the remaining shareholding for €123 million.
Magnite continues to target in excess of $35 million in run-rate operating cost synergies, with more than half of the synergies realised within the first year of combined operations.
RTL Group’s shareholders will benefit from the cash proceeds in line with the Group’s dividend policy.
In an open letter to clients and partners, Barrett said that together, the pair were the largest independent CTV and video advertising platform. “Although CTV and video are now as important to Magnite as ever, we will always be an omnichannel SSP serving sellers across the globe and helping buyers reach their targets across all formats including display, audio, and more,” he confirmed.
“This industry needs stronger alternatives to the conflicted giants that dominate it. You deserve partners that are big enough to compete with the giants, but are actually in it to see you win. That’s what we’re building at Magnite,” he asserted.
“Though we’re just beginning to integrate SpotX’s teams and technology, and there’s a lot of planning ahead, rest assured we’ve got you covered. Our immediate priority is continuity, even if our long-term goal is to unify the best of both CTV offerings into one platform,” he advised.