AdTech industry doesn’t spare any chance to throw up unique updates. Today, two major ad tech companies announced a key M&A deal that could change the Connected TV advertising technology landscape forever. Rubicon Project and Telaria will merge to create the world’s largest independent sell-side advertising platform, poised to capture growth in CTV.

Earlier this year, two content recommendation platforms  – Taboola and Outbrain, had joined hands to take on the duopoly of Google and Facebook advertising.

Telaria is a leader in Connected TV, and Rubicon Project is an expert in scaled Programmatic Advertising operations.

The M&A deal and the transition is expected to complete by mid-2020.

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Rubicon Project CEO will Lead the New Entity

Upon closing, Michael Barrett will be named Chief Executive Officer of the combined company, Mark Zagorski will be named President & Chief Operating Officer and David Day will be the Chief Financial Officer. Telaria board member Paul Caine will be Chairperson of the Board of Directors of the combined company. The full board will consist of nine members; four existing directors from each company and Michael Barrett, CEO.

At the time of this announcement, Michael Barrett, President & CEO of Rubicon Project said —

“The combination of Rubicon Project and Telaria will establish the world’s largest, independent sell-side advertising platform with scale, capabilities and solutions unmatched by the competition.”

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Combined Company Will Be an Essential Omnichannel Partner for Buyers Across Formats

Together, Rubicon Project and Telaria will enable thousands of publishers to connect with hundreds of buyers and brands, creating a global, independent alternative to closed players in the ecosystem. In addition, the combined company will be an essential omnichannel partner for buyers across formats, screens, and geographies. Both companies bring premium publisher partnerships and unique technical capabilities: Telaria as a leader in Connected TV advertising solutions, and Rubicon Project as an expert in scaled programmatic operations.

The combination of Rubicon Project and Telaria will create an essential omnichannel partner for buyers to reach their target audiences, across all formats and devices, anywhere in the world.

Big news: We’ve signed an agreement to merge with CTV leader @TelariaVideo. Together, we’ll be the largest independent sell-side ad platform in the world: one company, every format, and an essential omnichannel partner for sellers and buyers alike. https://t.co/opLnZwQ5lm pic.twitter.com/tPdWfjv3dF

— Magnite (@magnite) December 19, 2019

The result will be an optimized supply path across CTV, Desktop Display, Video, Audio, and Mobile, committed to exceptional client service, industry-leading transparency, robust support for identity solutions and brand-safe, fraud-free premium inventory.

Rubicon Project’s CEO Michael added, “This transformative combination builds on our commitment to trust and transparency and accelerates our strategy to provide buyers and sellers with a single path to every format and channel including CTV. We could not be more excited about the future as two individually strong industry leaders with complementary assets and cultures come together to create a market leader that we believe will generate significant opportunities for our employees, customers, partners, and stockholders worldwide.”

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New Identity Positioned to Capture the Growing CTV Opportunity

CTV is the fastest-growing digital medium, and an increasing amount of CTV viewing is ad-supported.

CTV offers advertisers the premium environment of television and the enhanced marketing capabilities of digital media. As with all digital media, CTV advertising is poised to be almost entirely programmatically transacted in the near future. Driven by Telaria’s leading market position and technology expertise, the combination of the two companies will provide additional engineering and sales resources, a broader geographic footprint and deeper financial assets to seize the CTV opportunity — to the benefit of our customers and in support of a thriving open internet.

“Our businesses are highly complementary, and when combined, are a powerful, strategic alternative to the walled gardens, which have been frustrating both buyers and sellers due to their lack of transparency, innovation bottlenecks, and conflicted business models,” stated Telaria CEO, Mark Zagorski.

Mark added, “The two companies will provide more technology resources, a broader geographic footprint and deeper financial assets to attack the growing opportunity created by the shift from linear viewing to CTV to the benefit of our customers and in support of a thriving open internet. For our stockholders, we believe this merger allows us to accelerate our growth while providing additional resources to increase investment and continue to scale our industry-leading CTV technology. For our employees, this is an opportunity for development and to fully realize the potential of what we have built these past few years in a scaled, omnichannel platform.”

Telaria + Rubicon Project on Way to Become The World’s Largest Independent Sell-Side Advertising Platform

The combination of Rubicon Project’s programmatic scale and expertise with Telaria’s leadership in CTV technology and premium partnerships will create the world’s largest independent sell-side advertising platform. The result will enable publishers to monetize across all auction types and formats including CTV, desktop display, video, audio, and mobile. Together, the combined company will offer publishers a transparent alternative that supports the open internet and provides more control over how they manage their businesses.

Strategic Global Expansion in 2020; Focus Shifts to EMEA and APAC Connected TV Market

Rubicon Project and Telaria have complimentary domestic and international footprints with strengths across the Americas, EMEA and APAC. In North America, the combined company will have strong technology and operations based in Los Angeles, New York, and Silicon Valley.

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Together, the global company will have offices in 11 countries with trusted relationships with the world’s leading buyers and sellers.

Combined Workforce to Drive Digital Transformation

Combined, Rubicon Project and Telaria will have more than 600 employees and contractors in 19 cities. Both companies are proud of their strong, employee-centric, client-focused corporate cultures. Rubicon Project and Telaria each recognize its employees are the most significant contributors to its success and will work to preserve and enhance that commitment as a combined entity.

Financial Details of the Deal

• Over the 12-month period ended September 30, 2019, Telaria and Rubicon Project’s aggregate revenue was $217 million, a 32% increase over the same period of the prior year
• The combined company will have diversified revenue streams, substantial Adjusted EBITDA and a strong balance sheet with approximately $150 million in cash and no debt-based on September 30, 2019 balances
• Merger expected to create meaningful revenue and cost synergies, with expected annual run-rate cost synergies of approximately $15-20 million.

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