Telecommunications firm AT&T has entered discussions to acquire AppNexus, a US-based online advertising platform developer backed by several corporate investors, for about $1.6bn, the Wall Street Journal reported on Tuesday.
AppNexus has built a range of online advertising products including a programmatic ad buying platform, a platform, a demand-side platform for ad buyers and an online marketplace where advertisers can connect to publishers.
The company has raised $343m in funding, most recently closing a $31m round in October 2016 that included $10m from media group News Corp. It reportedly filed confidentially for an initial public offering the following month, but has revealed no progress on the IPO since.
The prospective selling price is below the expected $2bn valuation for the IPO as well as the reported $1.8bn valuation at which it raised $62.7m from undisclosed investors in 2015.
AT&T is looking to buy AppNexus in the wake of its $85bn merger with media and entertainment group Time Warner, which closed last week.
The Warner deal gives AT&T access to a considerable amount of advertising space, especially on television, a medium through which its DirecTV subsidiary already sells ads.
AppNexus’ technology would help the corporate use data it already has on its wireless internet subscribers to target advertising more precisely. One of its largest rivals, Verizon, acquired online media company and former Warner partner AOL for $4.4bn in 2015.
Other investors in AppNexus include marketing group WPP, which provided $25m of a $110m series E round the company closed in 2014, telecoms group Deutsche Telekom, software provider Microsoft, Tribeca Venture Partners, First Round Capital, Technology Crossover Ventures, Venrock, Kodiak Venture Partners and Khosla Ventures.