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Video and Mobile AdTech M & A 2005 – 2014: Exit Valuations

  • September 2014
  • -
  • AccuStream Research
  • -
  • 80 pages

Video, desktop, mobile and multi-screen adtech M & A has mustered $1.5 billion in 2014 acquisition cash, 29% of $5.1 billion in cumulative dealings recorded since 2005 (excluding Google’s $3.1 billion buyout of DoubleClick), commencing when Gannett snapped up Pointroll’s rich media ad platform.
In aggregate, 32 adtech acquisitions have produced exit multiples of 3.75x paid against topline revenue (which can include ad spend prior to publisher payouts), and 7.61x net platform proceeds (i.e. revenue minus media costs associated with inventory management or ad clearing fees), according to an M & A report by AccuStream Research.
This adtech acquisitions report, Video and Mobile AdTech M & A 2005 – 2014: Exit Valuations, analyzes takeout multiples by device concentration, market position (i.e. ad network, impression trafficking platform, programmatic systems etc.), deals done by year, CAGR comparisons, net platform revenue (historical, current and projected through 2016) and format specialization (i.e. in-stream/in-banner video, display, rich media).

Revenue gained at the time each of these transactions was concluded totals $2.2 billion in topline and $1.1 in platform gross.
Excluding publicly traded adtech vendors (i.e. Tremor Video, YuMe, Inc., Millennial Media, etc.) recent private market valuations identify anywhere from $5.7 to $8.6 billion in key technology and business assets as acquisition prospects.
Mobile adtech multiples have averaged 3.29x topline and 12.88x net platform revenue. Multi-platform deals reveal a 2.75x topline multiple and 3.24x net platform revenue. Desktop-mobile video ad trafficking platforms (including LiveRail and FreeWheel) have averaged 2.19x topline and 4.21x net platform revenue.
Buying world class technology throttles up ad execution incentive, and those deals command rich multiples. Higher than average multiples paid for cross-platform ad trafficking acquisitions by names like AOL, Comcast and Facebook were made to assimilate enterprise caliber technology and engineering talent, while acknowledging ROI potential of and monetization requisites associated with the growth of virtual video advertising.

Table Of Contents

Video and Mobile AdTech M and A 2005 - 2014: Exit Valuations
EXECUTIVE SUMMARY 1
Robust Video and Mobile Adtech M and A Valuations Reflect the Operational Needs
and ROI Requisites of the Acquiring Entity 1
Video and Mobile Adtech M and A Surpasses $1.5 Billion in 2014 1
Mobile Adtech and Video Ad Trafficking Platforms Have Triggered High Revenue
Multiples, Frequency of M and A Activity and Take-Out Dollars 4
Present Exit Valuations Suggest $5.7 Billion to $8.6 Billion in Potential Adtech
Prospects 6

SECTION ONE 7
Global Adtech Exit Multiple Analytics 7
Robust Video and Mobile Adtech M and A Exit Valuations Reflect the Monetization
Requisites of Publishers 7
Video and Mobile Adtech M and A Surpasses $1.5 Billion in 2014 8
VIDEO AND MOBILE ADTECH PLATFORM M and A DEALS AND
DOLLARS: EXIT MULTIPLES 2005- 2014 11
Adtech Topline and Net Platform M and A Multiples have Generally Declined over the
Past Five Years 16
Adtech M and A in 2014 has Focused on Cross-Platform and Mobile Media Trafficking
Solutions 19
VIDEO AND MOBILE ADTECH M and A: EXIT MULTIPLES BY
ACQUISITION AND YEAR 2005 - 2014 20
Publicly Traded Adtech Solutions are Valued at a Discount Compared to Private
Market M and A in 2014 23
PUBLICLY TRADED ADTECH NETWORKS, SOLUTIONS AND
PLATFORMS: 2014 MARKET VALUATIONS (NET OF DEBT) 25
Mobile Adtech and Video Ad Trafficking Platforms have Compelled High Revenue
Multiples, Frequency of M and A Activity and Take-Out Dollars 26
VIDEO, MOBILE AND CROSS-DEVICE ADTECH M and A: TAKE-OUT
MULTIPLES AND VALUES BY DEVICE FORTE 2005 - 2014 29
Technology / Owned IP Often Attracts Higher Multiple Valuations Compared to CAGR
Revenue Performance 32
VIDEO AND MOBILE ADTECH PLATFORM M and A DEALINGS: CAGR
AND EXIT MULTIPLE RELATIONSHIP 2005 - 2014 33
Ad Technology Commands Loftier Exit Multiples Compared to Video Ad Trafficking,
Network and Format Specialist Deals 37
VIDEO AND MOBILE ADTECH PLATFORM PRIVATE MARKET M and A:
VIDEO SPECIALISTS VS. HYBRID FORMAT SOLUTIONS PROVIDERS
2005 - 2014 38
Recent Exit Valuations Suggest $5.7 Billion to $8.6 Billion in Potential Adtech
Acquisition Prospects 40



VIDEO AND MOBILE ADTECH, PROGRAMMATIC SYSTEMS AND
INVENTORY DATA SCIENCE 2014 - 2016: REVENUE AND MARKET
ACQUISITION/EXIT VALUATION SCENARIOS 41


SECTION TWO 43
Video Adtech M and A Roundup 43
Establishing M and A Valuations: Exit Multiples Closely Tied
To Solution and Product Positioning Inside the Video Adtech
Ecosystem 2014/2015 - 2016 43
Scale, Efficiency and Confidence: Optimizing against Demographics, Audience
Reach, Device and Impression Transparency 43
M and A staging zone: Inventory management, trafficking and the media
clearing ecosystem 2014/2015 - 2016 43
Desktop Video Adtech Systems Capture 60.8% of Net Ecosystem
Revenue in 2014 46
VIDEO and MOBILE ADTECH NET REVENUES: 2009 - 2016 47
Including Google, Exchanges and Programmatic Video Clearing Solutions Produce
60.7% of Net Platform Revenue in 2014 50
VIDEO AD CLEARING and TRAFFICKING ECOSYSTEM: ANNUAL
PLATFORM REVENUES 2008 - 2016 50
VIDEO AD CLEARING and TRAFFICKING ECOSYSTEM: ANNUAL
PLATFORM REVENUES 2008 - 2016 52
41.9% Of Video Adtech Revenue Beckons Additional M and A Activity in 2014/2015 53
VIDEO ADTECH PLATFORMS, PROGRAMMATIC SYSTEMS,
EXCHANGES, RTBs, BID MANAGEMENT SOLUTIONS and DATA
SCIENCE 2012 - 2016: CURRENT REVENUE and POTENTIAL
ACQUSITION VALUATION METRICS 55
Revenue Diversity: Video Adtech Solution Business Models and Payment Structures 56
VIDEO ADVERTISING NETWORKS, AD TRAFFICKING PLATFORMS,
AUCTIONS, EXCHANGES, RTBs, SSPs and DSPs: INVENTORY
PRICING ANALYSIS 2008 - 2013 56
Current M and A Multiples Attach A Sector-Wide Private Market Valuation of $13.2
Billion in 2014 58
VIDEO AD NETWORKS, ADTECH PLATFORMS, PROGRAMMATIC SYSTEMS,
BID MANAGEMENT SOLUTIONS and DATA SCIENCE 2008 - 2016:
ECOSYSTEM REVENUE PRIVATE DEAL MARKET VALUE 59
Digital Video Advertising Terminology and Definitions 61

SECTION THREE 67
Mobile Adtech M and A Roundup 67
Global Mobile M and A: IP, Adtech R and D, Audience Data, Ad Spend and Company
Positioning Driving Rich Multiples 67
Mobile adtech, geographic reach, advertising inventory growth and consumer
behavior predictability advancements are driving M and A valuations 67
Ad network market positioning 67
CAGR ANALYSIS: 2009 - 2016 67
Exchanges and auctions 68
SSPs (aggregated publisher inventory sources) 68
DSPs (aggregated sources of inventory demand) 68
RTBs/Programmatic trading 69
Sources of inventory/impression requests 69
CAGR Bonus: Mobile Adtech Net Platform Revenue Growing at 50.2% in 2014,
41.4% in 2015 70
MOBILE ECOSYSTEM NET ADTECH/PLATFORM REVENUE: 2009 - 2016 70
Global Mobile Adtech Solutions Have Diversified Business Models and Support
Multiple Impression Formats 72
MOBILE ADTECH NETWORKS, PLATFORMS, AUCTIONS,
EXCHANGES and RTBs: BILLING, BUSINESS MODEL AND
INVENTORY FORMATS 72
Global Mobile Adtech Net Platform Revenue at $3.4 Billion in 2014, $6.5 Billion
by 2016 74
MOBILE ADVERTISING NETWORKS, ADTECH SOLUTIONS,
PLATFORMS, AUCTIONS, EXCHANGES and RTBs: NET REVENUE
BY COMPANY 2009 - 2016 74
32.4% of Non-Aligned Global Mobile Adtech Revenue Base Indicates a Total M and A
Opportunity of $4+ Billion in 2014/2015 77
MOBILE ADTECH PLATFORMS, EXCHANGES and RTBs: REVENUE
MULTIPLES and AVAILABLE MARKET VALUATION/EXIT
SCENARIOS: 2014 - 2016 79
Mobile Adtech Platforms and Inventory: Terms and Definitions 80

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