Why Magnite Is Buying SpotX For $1.17 Billion In Cash And Stock

By Amit Chowdhry ● February 5, 2021
  • Magnite (Nasdaq: MGNI) — the largest independent sell-side advertising platform – recently announced it has entered into a definitive agreement to acquire SpotX from RTL Group for $1.17 billion in cash and stock. These are the details.

Magnite (Nasdaq: MGNI) — the largest independent sell-side advertising platform – recently announced it has entered into a definitive agreement to acquire SpotX from RTL Group for $1.17 billion in cash and stock. SpotX is known as one of the leading platforms shaping CTV and video advertising globally.

Magnite and SpotX will create the largest independent CTV and video advertising platform in the programmatic marketplace. And the combined company will provide better support for sellers, create an alternative to the CTV advertising market’s largest players, and greatly improve scale and efficiency for buyers.

The combined company will serve some of the world’s leading programmers, broadcasters, platforms and device manufacturers, including A+E Networks, Crackle Plus, The CW Network, Discovery, Disney/Hulu, Electronic Arts, Fox Corporation, fuboTV, Microsoft, Newsy, Philo TV, Pluto TV, Roku, Samsung, Sling TV, Tubi, ViacomCBS, Vizio, Vudu, WarnerMedia, and Xumo.

And Magnite’s expanded technical capabilities and teams will be able to move more quickly and cater to a broader set of client needs, including sellers that are newer to the world of programmatic and those who have mature, programmatic-only operations. Plus the acquisition will make it easier for brands and agencies to buy premium CTV inventory at scale with standard features and a single, addressable pool of audiences.

Magnite is targeting over $35 million in run-rate operating cost synergies with more than half of the synergies realized within the first year of combined operations. And Magnite plans to finance the transaction with cash on hand, 14 million shares issued to RTL Group and committed financing from Goldman Sachs. 

The company is expecting the transaction to close in the second quarter of 2021, subject to receipt of regulatory approvals and satisfaction of customary closing conditions. And until the transaction closes, both companies will continue to operate independently.

Goldman Sachs and LUMA Partners had acted as financial advisors to Magnite and Goldman Sachs is providing committed financing for the transaction. And Gibson Dunn provided legal counsel to Magnite.

KEY QUOTES:

“Sellers have been looking for a scaled independent alternative to the giant companies who dominate the CTV marketplace. The combination of Magnite and SpotX will make this a reality by bringing together the best CTV technologies and teams at a critical time. Ad-supported CTV is just beginning to draw budgets from linear TV and we will be well-positioned to participate in the strongest segment of industry growth for the foreseeable future.”

— Michael Barrett, President & CEO of Magnite

“As CTV flourishes and the media industry continues to turn to programmatic, there is a huge opportunity for an independent scaled company to offer the single most comprehensive technology in the market. We built SpotX with the mission of becoming the leading global video advertising platform, and our goal is now coming to fruition with Magnite. I am thrilled about what we will achieve together.”

— Mike Shehan, Co-Founder and CEO at SpotX

“We are excited about the combination of SpotX and Magnite, two leading CTV advertising providers. This transaction allows for significant value creation and upside potential for the parties, sellers and advertisers in the growing CTV market. We look forward to participating in the future success of SpotX and Magnite as shareholders in the combined entity.”

– Thomas Rabe, CEO of RTL Group