Magnite (Nasdaq: MGNI) today closed its previously-announced
acquisition of SpotX from RTL Group, creating the largest
independent CTV and video advertising platform, and reinforcing the
company’s capabilities as linear TV budgets increasingly shift to
digital.
Buyers and sellers have long wanted a scaled, independent
alternative to the giants that currently dominate the CTV
marketplace. 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,” said 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.”
Today, Magnite 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 monetize 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. Acquisition Gets Broad Industry Support
“The unification of SpotX and Magnite will create a
comprehensive advertising technology stack for both publishers and
TV programmers,” said Louqman Parampath, Vice President of Product
Management at Roku. “As TV ad dollars continue to shift from
traditional TV into streaming, the combined capabilities of Magnite
will enable Roku, publishers, and ad buyers to better meet their
programmatic advertising goals. An independent, scaled solution is
also good for the health of the overall ad ecosystem.”
“The combination of Magnite and SpotX unites two of the best
technologies and teams in CTV,” said Jill Steinhauser, Senior Vice
President, Ad Sales Revenue and Planning at Discovery. “As CTV is
poised to experience rapid growth for the foreseeable future, we’re
thrilled to continue our relationship with Magnite with its
expanded CTV capabilities and set ourselves up for huge success in
this arena.”
“As advertisers continue to invest in multi-platform viewing
environments, it remains paramount that we leverage programmatic to
activate campaigns to simplify buys across the FOX portfolio,” said
Dan Callahan, Senior Vice President of Data Strategy and Sales
Innovation for FOX. “We look forward to our continuing
collaboration with Magnite as it expands its CTV and OTT
capabilities and scale with the acquisition of SpotX.”
“As advertising and media continue to move towards digital and
data-driven programmatic, transparency and quality inventory are
top priorities for us," said Scott Keslar, Purchasing Senior
Manager of Global Programmatic at The Procter & Gamble Company.
"Magnite understands and delivers on these fronts. We see the
addition of SpotX to Magnite as a positive development which will
enable further scale in the premium video/CTV environment.”
“CTV continues to be the fastest-growing channel globally, and
by providing the technology that Magnite brings together makes it
that much easier for advertisers to place ads on the largest screen
in the room,” said Tim Sims, Chief Revenue Officer at The Trade
Desk. “Advertisers increasingly continue to leverage digital media
campaigns where they can see the full ecosystem of media buys
across the open internet, and it’s important for us to be at the
forefront with companies like Magnite.”
Transaction Details
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 based on
yesterday’s closing stock price.
Magnite continues to target in excess of $35 million in run-rate
operating cost synergies, with more than half of the synergies
realized within the first year of combined operations.
Magnite will discuss additional details about the transaction
and Q1 2021 results of both entities on its Q1 2021 earnings
conference call on Monday, May 10th.
To learn more about the combined company’s strategy, please see
CEO Michael Barrett’s blog post.
Forward-Looking Statements
This press release may include forward-looking statements,
including statements based upon or relating to our expectations,
assumptions, estimates, and projections. In some cases, you can
identify forward-looking statements by terms such as “may,”
“might,” “will,” “objective,” “intend,” “should,” “could,” “can,”
“would,” “expect,” “believe,” “design,” “anticipate,” “estimate,”
“predict,” “potential,” “plan” or the negative of these terms, and
similar expressions. Forward-looking statements may include, but
are not limited to, statements concerning the acquisition of SpotX
and/or the anticipated benefits thereof; potential impacts of the
COVID-19 pandemic on our business operations, financial condition,
and results of operations and on the world economy; our anticipated
financial results; strategic objectives, including our focus on
connected television (“CTV”), mobile, video, header bidding, Demand
Manager, identity solutions and private marketplace opportunities;
investments in our business; development of our technology; the
elimination of third-party cookies and the shift to a publisher
focused identity regime; industry growth rates for ad-supported CTV
and the shift in video consumption from linear TV to CTV;
introduction of new offerings; the impact of our traffic shaping
technology on our business; scope and duration of client
relationships; the fees we may charge in the future; business mix
and expansion of our CTV, mobile, video and private marketplace
offerings; sales growth; client utilization of our offerings; our
competitive differentiation; our market share and leadership
position in the industry; market conditions, trends, and
opportunities; certain statements regarding future operational
performance measures including ad requests, fill rate, paid
impressions, average CPM, take rate, and advertising spend;
benefits from supply path optimization; and other statements that
are not historical facts. These statements are not guarantees of
future performance; they reflect our current views with respect to
future events and are based on assumptions and estimates and
subject to known and unknown risks, uncertainties and other factors
that may cause our actual results, performance or achievements to
be materially different from expectations or results projected or
implied by forward-looking statements. These risks include, but are
not limited to: risks inherent in the achievement of anticipated
synergies and the timing thereof; our ability to successfully
integrate the SpotX business, and realize the anticipated benefits
of the acquisition; the severity, magnitude, and duration of the
COVID-19 pandemic, including impacts of the pandemic and of
responses to the pandemic by governments, business and individuals
on our operations, personnel, buyers, sellers, and on the global
economy and the advertising marketplace; our ability to grow and to
manage our growth effectively; our ability to develop innovative
new technologies and remain a market leader; our ability to attract
and retain buyers and sellers of digital advertising inventory, or
publishers, and increase our business with them; our vulnerability
to loss of, or reduction in spending by, buyers; our reliance on
large sources of advertising demand, including demand side
platforms (“DSPs”) that may have or develop high-risk credit
profiles or fail to pay invoices when due, including as a result of
general liquidity constraints experienced by buyers from the
COVID-19 pandemic, which has caused certain buyers to delay
payments or seek revised payment terms; our ability to maintain and
grow a supply of advertising inventory from sellers and to fill the
increased inventory; the effect on the advertising market and our
business from difficult economic conditions or uncertainty; the
freedom of buyers and sellers to direct their spending and
inventory to competing sources of inventory and demand; the ability
of buyers and sellers to establish direct relationships and
integrations; our ability to cause buyers and sellers to use our
solution to purchase and sell higher value advertising and to
expand the use of our solution by buyers and sellers utilizing
evolving digital media platforms, including CTV; our reliance on
large aggregators of advertising inventory, and the concentration
of CTV among a small number of large publishers that enjoy
significant negotiating leverage; our ability to introduce new
offerings and bring them to market in a timely manner, and
otherwise adapt in response to client demands and industry trends,
including shifts in linear TV to CTV, digital advertising growth
from desktop to mobile channels and other platforms and from
display to video formats and the introduction and market acceptance
of Demand Manager; uncertainty of our estimates and expectations
associated with new offerings, the possibility of lower take rates
and the need to grow through increasing the volume and/or value of
transactions on our platform and increasing our fill rate; our
vulnerability to the depletion of our cash resources as a result of
the adverse impacts of the COVID-19 pandemic, or as we incur
additional investments in technology required to support the
increased volume of transactions on our exchange and to develop new
offerings; our ability to support our growth objectives in light of
reduced resources resulting from the cost reduction initiatives
that we implemented; our ability to raise additional capital if
needed; our limited operating history and history of losses; our
ability to continue to expand into new geographic markets and grow
our market share in existing markets; our ability to adapt
effectively to shifts in digital advertising; increased prevalence
of ad-blocking or cookie-blocking technologies and the slow
adoption of common identifiers; the development and use of
proprietary identity solutions as a replacement for third party
cookies and other identifiers currently used in our platform; the
slowing growth rate of desktop display advertising; the growing
percentage of online and mobile advertising spending captured by
owned and operated sites (such as Facebook, Google and Amazon); the
adoption of programmatic advertising by CTV publishers; the
effects, including loss of market share, of increased competition
in our market and increasing concentration of advertising spending
in a small number of very large competitors; the effects of
consolidation in the ad tech industry; acts of competitors and
other third parties that can adversely affect our business; our
ability to differentiate our offerings and compete effectively to
combat commodification and disintermediation; the effects of buyer
transparency initiatives we may undertake; requests for discounts,
fee concessions or revisions, rebates, refunds, favorable payment
terms; our ability to ensure a high level of brand safety for our
clients and to detect “bot” traffic and other fraudulent or
malicious activity; the effects of seasonal trends on our results
of operations; costs associated with defending intellectual
property infringement and other claims; our ability to attract and
retain qualified employees and key personnel; political uncertainty
and the ability of the company to attract political advertising
spend; our ability to identify future acquisitions of or
investments in complementary companies or technologies and our
ability to consummate the acquisitions and integrate such companies
or technologies; and our ability to comply with, and the effect on
our business of, evolving legal standards and regulations,
particularly concerning data protection and consumer privacy and
evolving labor standards.
We discuss many of these risks and additional factors that could
cause actual results to differ materially from those anticipated by
our forward-looking statements under the headings “Risk Factors”
and “Management's Discussion and Analysis of Financial Condition
and Results of Operations,” and elsewhere in filings we have made
and will make from time to time with the Securities and Exchange
Commission, or SEC, including our Annual Report on Form 10-K for
the year ended December 31, 2020. These forward-looking statements
represent our estimates and assumptions only as of the date of the
report in which they are included. Unless required by federal
securities laws, we assume no obligation to update any of these
forward-looking statements, or to update the reasons actual results
could differ materially from those anticipated, to reflect
circumstances or events that occur after the statements are made.
Without limiting the foregoing, any guidance we may provide will
generally be given only in connection with quarterly and annual
earnings announcements, without interim updates, and we may appear
at industry conferences or make other public statements without
disclosing material nonpublic information in our possession. Given
these uncertainties, investors should not place undue reliance on
these forward-looking statements. Investors should read this
document with the understanding that our actual future results may
be materially different from what we expect. We qualify all of our
forward-looking statements by these cautionary statements.
About MagniteWe’re Magnite (NASDAQ: MGNI), the
world’s largest independent sell-side advertising platform.
Publishers use our technology to monetize their content across all
screens and formats—including desktop, mobile, audio and CTV. And
the world's leading agencies and brands trust our platform to
access brand-safe, high-quality ad inventory and execute billions
of advertising transactions each month. Anchored in sunny Los
Angeles, bustling New York City, historic London, and down under in
Sydney, Magnite has offices across North America, EMEA, LATAM and
APAC.
Investor RelationsNick
Kormeluk949-500-0003nkormeluk@magnite.com
Media RelationsCharlstie
Veith516-300-3569cveith@magnite.com
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