You know those auto-play advertisements that are becoming more and more prevalent on TV station websites, among other places one would travel with a web browser?
The owner of Optimum just bought the No. 1 player in the space.
Altice has entered into an agreement to acquire Teads, the leading global online video advertising marketplace. Teads reaches an audience of more than 1.2 billion unique visitors across the planet, including 720 million via mobile platforms, Altice says.
Teads, founded in June 2011, has 27 offices around the world. In North America, Teads has offices in Los Angeles, San Francisco, Chicago, Toronto, Mexico City, New York and Miami.
Teads’ FY2016 revenue was $200 million.
Teads is considered the “inventor of outstream video advertising.” As Altice describes the company it’s buying, “Publishers work with Teads to create brand new video inventory and manage their existing inventory, monetizing it through their own sales force, Teads sales force, or programmatic buying.”
Altice calls the acquisition “another critical component” for its global advertising strategy; Optimum is but a small segment of Altice’s global businesses.
“Altice will provide clients with data-driven, audience-based advertising solutions on multiscreen platforms including TV, digital, mobile and tablets,” the company said. “It will also provide an open and intelligent advertising platform to the media industry, programmers and multichannel video programming distributors.”
Additionally, Altice says the deal puts the company “in a unique position to grow its global advertising platform and better monetize its core telecommunications access and content business.”
Perhaps the most important aspect of this deal is that the combination “is expected to provide immediate commercial and financial benefits to Altice’s advertising business, in particular as it relates making unique first-party data available to Teads in the U.S. and France,” Altice notes.
The acquisition values Teads at an enterprise value of up to €285 million ($308.2 million USD) on a cash and debt free basis. But, the purchase price is subject to Teads achieving certain revenue targets in 2017. Additionally, 75% of the acquisition purchase price will be due at closing. The remaining 25% earn-out is subject to Teads’ 2017 revenue performance and will become payable in early 2018.
Altice says the acquisition is immediately accretive to its operating free cash flow before taking into account the expected synergies and strategic benefits of the transaction.
The senior management of Teads, including Executive Chairman Pierre Chappaz and CEO Bertrand Quesada, will continue to lead the business going forward and have agreed to reinvest a significant portion of their proceeds.
Pierre Chappaz will join Altice’s Management Board responsible for all of its advertising activities.
The acquisition is subject to certain competition reviews and is expected to close in mid-2017