Another telco is buying an ad tech firm — today it’s been confirmed that video ad player Teads is being acquired by Dutch telecom Altice, which has some 50 million fixed and mobile subscribers, the majority of whom are in the US and France. While Teads claims its global online video advertising marketplace has more than 1.2BN unique visitors, including 720M via mobile.
Teads is being valued at €285M (~$308M) “on a cash and debt free basis” by Altice, with the purchase price subject to it meeting certain revenue targets in 2017. Seventy-five percent of the purchase price will be due at closing — with the remaining quarter becoming payable in early 2018, should targets be met.
The pair say they are expecting to acquisition to close in mid-2017, following competition reviews.
Teads offers so-called ‘outstream’ video ad format — enabling ads to be displayed outside of a video stream, such as within any content on a webpage, thereby enabling publishers to house video ads without needing to produce their own video content to host the ad inventory. Its revenue grew by 44% in 2016 to an estimated €187.7M.
The French company was founded back in 2011, and despite previously talking up the prospect of an IPO Teads has remained private, while making some acquisitions of its own. It also merged with another adtech firm, Ebuzzing, in 2014.
As noted above, there’s a growing trend of telcos going shopping for ad tech firms — not least TechCrunch’s parent company AOL’s parent Verizon which is also in the process of closing in on Yahoo‘s ad tech.
Altice and Teads say the acquisition rationale is the strategic combination of their assets — citing, for example, the advantage of being able to link Altice’s “unique first party data-sets” (aka the personal data of the 50M subscribers to its broadband and mobile services) with Teads “relationships with 94 of the top 100 advertisers globally” and “partnerships with 500+ premium publishers globally and 8,000 vertically specialized publishers”.
In simpler terms this is about telcos monetizing knowledge of their vast user-bases by finding ways to benefit from serving them targeted premium advertising — and in the US now encouraged by President Trump’s new FCC chairman pick, Ajit Pai, who is a fan of very-light-touch regulation (vs the prior FCC chairman’s intent to expand broadband privacy rules).
Commenting in a statement, Michel Combes, CEO of Altice, said: “There is significant incremental value to be generated from our assets. Teads, a powerful business in itself, with major presence in Altice footprint notably in the U.S. and France, will enable us to offer a truly unique value proposition to brands and agencies on the one hand and the media industry, programmers and distributors on the other. It is that value proposition — data-driven, measurable and multiscreen — which will enable us to significantly grow our advertising business. We are very excited to partner with Pierre, Bertrand and their talented team.”
While Pierre Chappaz, founder and executive chairman of Teads, added: “Since our inception we have strived to offer our clients with superior advertising solutions based on measurable performance and technological innovation. As part of Altice, we will be able to offer even more tailored, data-driven solutions and take our value proposition from the digital world to a multiscreen platform, which includes TV, digital, mobile and tablets.”
Altice’s stock was trading up 1.45% following the announcement.