Undertone's $180m purchase demonstrates that rich media was the darling of ad tech in 2015
Isreal-based Perion Networks has announced the purchase of rich media advertising outfit Undertone for the sum of $180m, in a deal that signifies that video advertising outfits were one of the hottest properties for those on the hunt for ad tech outfits in 2015.
The deal was announced earlier today (1 December,) with the purchase further signifying the ongoing consolidation in the ad tech sector - a trend that has carried on from 2014, and one that has seen companies in the programmatic sector seek to further their wares in both mobile and video.
JMP Securities advised on the deal, with the acquisition taking place in the form of a $91m payment in cash from Perion an additional $16m as a holdback, payable in 18 months, $3m payable in installments over the next 18 months and another $20m, bearing interest, due in 2020.
In addition, the Company has entered into a new long-term credit agreement with the existing Undertone lenders, SunTrust Robinson Humphreys, Silicon Valley Bank and Comerica Bank, for $50m.
Perion CEO Josef Mandelbau said the purchase enabled the company to expand into the reach media sector of online advertising, and the purchase also enabled it to expand its mobile footprint and as well as extend its programmatic capabilities.
Corey Ferengul, CEO of Undertone, added: “I am excited that Undertone’s success with high-impact formats and great relationships with brands and agencies have brought us to this point in the company’s evolution."
The purchase comes on top of a year on consolidation in the sector, which saw several of the larger independent ad tech outfits make multiple purchases in the market including, notably AppNexus' purchase of Yieldex.
This was also accompanied by larger ad tech outfits also further their interests in programmatic advertising, such as Yahoo's acquisition of BrightRoll, and most notably then increased encroachment of telecoms players with Verizon Wireless purchasing AOL, then the latter buying mobile specialist Millennial Media.