A comprehensive M & A analysis conducted recently shows online video and mobile adtech markets continue to consolidate, with $17.5 billion in acquisitions generated to date across all vendor-related adtech categories since 2005, with 2014 and 2015 documenting peaks exit dollars, and more to come.
Looking at 2016, $776 million in deals account for 4.4% of total M & A deals done, with current year's total reached at an average topline revenue exit multiple (run-rate) of 1.90x.
Historically, up to the present time (and including Google's acquisition of DoubleClick), these sectors have commanded revenue multiple averages of 2.33x paid against topline revenue (which may in some cases include revenue share from inventory management prior to publisher payout or media costs), though the average is clearly trending downward.
Further analysis shows a 12.76x paid against gross profit, or net platform revenue, according to the multi-sector appraisal Digital Video and Mobile AdTech in the M & A Crosshairs 2005 - 2016: $17.5 Billion in Deals and Counting, with all data and analysis provided.
Ad networks and some ad clearing mechanisms control, manage or arbitrage inventory (i.e., media avails), and those revenue figures are included in the topline number.
Net platform revenue or gross revenue is revenue minus COGS (i.e., revenue minus any media costs associated with inventory management, network or ad clearing).
Revenue acquired at the time deals were finalized totaled $7.5 billion in topline, and $1.3 billion in gross profit. Even so, revenue is not necessarily a primary reason adtech acquisitions are made, regardless of core platform/device specialty.
These adtech deals are structured to satisfy two essential considerations: 1) Market positioning (i.e., buying market share) or shortening time to market; and 2) Acquiring in-process R & D or required pieces of technology to further in-house ad clearing initiatives. Those deals have typically been made at a premium.
For example, Google bought DoubleClick in 2006 for $3.1 billion and AdMob in 2010 for $750 million, both at market premiums.
The digital video adtech sector is more highly consolidated, at present, than its mobile adtech counterpart, according to the sector study.
This research study analyzes 88 deals, and is an essential investment resource for investors, venture capitalists, ad agencies, adtech vendors, media companies with significant exposure to digital advertising markets, advertisers and marketers, and includes:
- Acquisition price
- Topline revenue
- Gross revenue (i.e., revenue minus any media related costs taken out at the COGS line)
- EBITDA, where relevant
- Market positions (networks, DSPs, SSPs, audience and marketing platformsincluding Twitter, ad servers, DMPs, tech platforms and more)
- Business models
- Core solutions and services focus
- A detailed analysis of each adtech sector and the market dynamics driving valuations
- Growth forecasts for each segment, each vendor category and each vendor by adtech sector (desktop, mobile, cross-channel)
- Revenue forecasts for independently or publicly traded adtech vendors
- Time, Inc.
- Triton Digital
- Vector Capital
- Viant/Specific Media
For more information about this report visit http://www.researchandmarkets.com/research/f7h6rt/digital_video_and
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SOURCE Research and Markets