Telecommunications firm AT&T agreed yesterday to acquire US-based online advertising platform AppNexus for an undisclosed amount, allowing corporates WPP, News Corp, Microsoft and Deutsche Telekom to exit.
Although the price has not been confirmed, the Wall Street Journal reported last week that the amount would likely be around the $1.6bn mark. The company reportedly filed confidentially for an initial public offering in 2016 that was expected to value it at $2bn.
Founded in 2007, AppNexus runs an online marketplace for digital advertising where brands and advertisers can connect with publishers. Fees are transparent and websites and apps are curated to ensure their content is appropriate.
The company has also built a range of digital advertising products including a programmatic platform that can be used to create custom automated ad buying algorithms.
AT&T intends to use the purchase to enhance its advertising ventures, particularly in television. It merged with Warner Media, the owner of TV properties including Turner Broadcasting System and HBO, earlier this month in an $85bn deal.
Specifically, AppNexus’ technology will feed into AT&T’s existing data, video content and advertising distribution resources, adding to their analytics capabilities.
Brian Lesser, CEO of AT&T’s advertising and analytics division, said: “Adtech unites real-time analytics and technology with our premium TV and video content. So, we went out and found the strongest player in the space. AppNexus has scale of infrastructure, advanced technology and diverse talent.
“The combination of AT&T advertising and analytics and AppNexus will help deliver a world class advertising platform that provides brands and publishers a new and innovative way to reach consumers in the marketplace today.”
The deal followed $343m of equity financing for AppNexus, which was valued at $1.8bn as of a $62.7m round in 2015 backed by undisclosed investors. Media group News Corp invested $10m in the company as part of a $31m round that closed in late 2016.
AppNexus had previously raised $110m from marketing firm WPP, software producer Microsoft, telecommunications group Deutsche Telekom, Technology Crossover Ventures, Venrock, Kodiak Venture Partners, Tribeca Venture Partners, First Round Capital and Khosla Ventures in 2014.