Millennial Media is to acquire mobile supply-side platform (SSP) and ad exchange Nexage for $107.5m (£65.5m).
The mobile ad platform will pay approximately $22.5m (£14m) in cash and $85m (£52m) in stock, subject to adjustments, with Nexage shareholders to receive circa 37 million newly issued shares of Millennial Media based on a price of $2.21 (£1.35) per share.
Millennial Media expects the Boston-based Nexage to help strengthen its current programmatic mobile ad trading offering, in turn increasing yields for publishers and opening up more data-rich, real-time bidding-based audience buying opportunities for advertisers.
Michael Barrett, president and chief executive of Millennial Media (pictured), said the acquisition will help bolster its ability to educate advertisers and publishers on the benefits of programmatic trading.
“We are in a very exciting time right now as we help to build, educate and advance the role of RTB and programmatic solutions to advertisers, publishers, and developers.
“Our vision is to create a full-stack solution that enables us to open the flow of impressions, operate a leading independent exchange, and maximize the yield for our publishers.
“The opportunity to integrate Nexage’s programmatic technology with our deep roots and heritage in agency relationships will uniquely position us in this fast paced ecosystem. Together, our companies will be able to offer managed services for agencies and a complete set of programmatic tools for automated buyers. We are looking forward to having the Nexage team join our family as we continue to build the next generation of mobile advertising.”
Meanwhile, in light of the agreed acquisition terms, Millennial Media has reaffirmed that it expects revenue for the third quarter of 2014 to reach $70m (£43m), with adjusted EBITA to be loss of $8m (£4.8m).
Luma Securities acted as the financial advisor to Millennial Media and GCA Savvian advised Nexage.
The news marks the latest in a string of developments in the mobile programmatic trading sector, with WPP seizing a $25m (£15.2m) stake in mobile exchange AppNexus earlier this week.
Also this month Microsoft opened up all its mobile inventory to its global exchange for the first time, having partnered with AppNexus.