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Sizmek is the latest ad tech vendor to be picked up by a private equity firm after Vector Capital made a deal to acquire the company for US$122 million (AUD$160.3m).
The vendor, which provides programmatic advertising management solutions, is being picked up for $3.90 per share in cash, a purchase price that represents a 65 per cent premium on its average trading price in recent months. The deal is expected to close in Q4 of this year.
In a statement, Vector Capital MD, Alex Beregovsky, said the firm planned to invest in the company’s growth, work to strengthen its open ad management platform, launch adjacent product offerings and bolster Sizmek’s coffers so it can make further strategic acquisitions.
Just last year, Sizmek purchased mobile DSP, StrikeAd, in a deal worth US$11.7 million, as well as PointRoll, a multi-screen digital ad tech and services company with technology for customising ads based on inventory, demographics and location, for US$20m.
“We believe this transaction provides Sizmek with the resources and flexibility to execute upon our long-term strategy of becoming the leading independent, global ad management platform,” said Sizmek president and CEO, Neil Nguyen.
“We are excited to partner with vector and believe this transaction benefits our customers, employees, partners and shareholders.”
Sizmek is arguably one of the older adtech players in the market and has been operating for 15 years, initially under the Digital Generation brand, before rebranding to Sizmek in 2013. The decision came after it sold its linear TV ad delivery division to Extreme Reach. It then went public on the Nasdaq in February 2014.
It claims to have about 19,000 advertisers and 3700 agency customers, and serve more than 1.3 trillion impressions per year through all forms of digital advertising campaigns. Prior to the acquisition agreement, its market capitalisation sat at US$72.8m.
Its new owner, Vector Capital, has invested US$1.6 billion in more than 40 technology companies, including retail marketing automation platform vendor, Emarsys, security management software player, LanDesk, and security vendor, Watchguard.
The Sizmek acquisition is the latest in a string of private equity purchases in the martech and adtech space this year. In April, Teradata's marketing applications business was purchased for US$900m by Marlin Equity Partners, while in June, marketing automation player, Marketo, was snapped up by Vista Equity Partners for US$1.79bn.
Other notable private equity purchases in the space in the last 1-2 years include Symphony Technology Group’s acquisition of Experian Marketing Services’ consumer insights division ($47m), EQT’s majority stake investment into Sitecore, Cathay Capital buying ad platform, Smart AdServer, RockBridge Growth Equity’s acquisition of digital agency, Triad Retail Media, and Audax Group’s purchase of out-of-home ad delivery platform, AllOver Media.