Magnite Purchases SpotX in a Billion-Dollar Deal

The deal is part of Magnite’s long-term plan to expand its influence in the video advertising market.

California, USA / February 10th, 2021/ In a move to become a powerhouse in the global video advertising platform, Magnite has agreed to purchase SpotX, a global video ad serving platform.

Announced on February 5, 2021, US company Magnite has acquired SpotX from European media giant RTL Group. The acquisition came shortly after the RTL Group announced they were selling the company, which they, too, acquired in 2017.

The sale is a cash and stock deal, with the selling price of $1.7 Billion being four times the amount the RTL Group originally bought it for. In 2014, the RTL Group purchased a $144 Million stake in SpotX, and later in 2017, bought the remainder of the company for an additional $145 Million.

Magnite's purchase will consist of $560 Million in cash and 14 million in shares of Magnite stocks. Magnite is reported to be able to make this billion-dollar purchase due to their rising stock value, which increased up to 13% in January, allowing them to engage in big deals. After the SpotX acquisition was announced, Magnite's stock value rose to an even further increase by up to 26%.

The deal is expected to close in the 2nd quarter of the year, which meets Magnite CEO's vision for the company to build a highly scaled independent programmatic CTV and video ad platform. Magnite is formerly known as Rubicon, which merged with Telaria, a video management platform in late 2019. Together, Rubicon and Telaria became Magnite in June of 2020.

Interest in these types of platform is on the rise as YouTube and other video streaming services have helped make video ads more popular than ever. Though these platforms favor shorter ads, the use of professional graphics combined with professional voice overs helps to get the message across in a short timeframe.

With SpotX being a platform for connected TV and video advertising, this acquisition is slated to make Magnite the largest independent CTV and video ad platform in the world. According to Magnite CEO Michael Barrett, "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 growth for the foreseeable future."

SpotX's managing director, Ilda Jamison, echoes this sentiment, as she has said in an interview with AdNews, Australia's leading trade brand, "Magnite shares our strong commitment to our customers in providing the most comprehensive CTV/OTT technology in the world. By integrating our business, technologies, and services, we have the opportunity to become the leading video advertising platform."

CTV is a small piece in Magnite's overall business but is seen as a big growth opportunity for the company. About 80% of Magnite's revenue comes from desktop and mobile but CTV is dubbed to be the "crown jewel," of the business. CTV has been a rising sector in the pandemic. With more people staying home and streaming movies and shows, opportunities for ad-tech companies are rising.

Magnite provides an avenue for websites, CTV channels, apps, and other digital forms of media to sell space across their media platforms. It is expected that this acquisition will create opportunities for most of the leading programmers and broadcasters of companies such as Samsung, Disney, Hulu, ViacomCBS, and Warner Media.

Acquiring SpotX, is, therefore, seen by Magnite to deepen its strength in streaming ads, as more and more people all over the world have shifted to video streaming for their sources of home entertainment.