RTL Group to sell SpotX in $1.2BN deal
Details
Joseph O'Halloran
| 05 February 2021
As part of its strategy to concentrate on growing its European digital businesses in streaming, advertising technology and digital video content, media giant RTL has signed a definitive agreement for the sale of its SpotX business line to fellow US ad tech business Magnite.
SpotX 4Dec2020
Based in Los Angeles and founded following the merger between Rubicon Project and Telaria in April 2020, Magnite is claimed to be the largest independent sell-side advertising platform, having integrated Rubicon Project’s expertise as a scaled programmatic exchange and Telaria’s connected TV (CTV) capabilities to connect publishers with buyers and brands. The company’s omnichannel advertising platform is designed to enable publishers to monetise across all auction types and formats including CTV, desktop display, video, audio, and mobile.

RTL Group acquired a 65% majority shareholding in SpotX for €107 million in 2014, and took full ownership of SpotX in 2017, acquiring the remaining shareholding for €123 million. The sale of SpotX is subject to receipt of regulatory approvals and is expected to close in the second quarter of 2021 and the purchase price consists of US$560 million (€468 million) in cash and 14.0 million shares of Magnite stock. The agreement implies a full enterprise value for SpotX of US$1.17 billion (€977 million) based on the closing price of Magnite stock as of 4 February 2021.

Commenting on the sale, RTL Group CEO Thomas Rabe said: “The sale of SpotX is fully in line with our strategy to concentrate on growing our European digital businesses in streaming, advertising technology, digital video and audio as well as our global content business, Fremantle. SpotX is a fantastic business, focused on the United States and with significant potential. We look forward to participating in the future success of SpotX and Magnite as shareholders in the combined entity.”

“Sellers have been looking for a scaled independent alternative to the giant companies who dominate the CTV marketplace,” added Magnite president and CEO Michael Barrett. “The combination of Magnite and SpotX will make this a reality by bringing together the best CTV technologies and teams at a critical time. 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 industry growth for the foreseeable future.”

Despite the sale, Rabe stressed that advertising technology remained a strategic priority for RTL Group, an area that would going forward be addressed by its other ad-tech companies Smartclip and Yospace.

“To successfully transform our business, two factors are particularly important. One is higher reach, in both linear and non-linear TV. The second is better monetisation of our reach, through targeting and personalisation – and this requires state-of-the-art advertising technology and data management. With our European ad-tech companies Smartclip and Yospace, we have made significant progress in building an open European ad-tech platform and in tapping into the high-growth market of addressable TV advertising.” RTL noted that in Germany alone, the market for addressable TV advertising is expected to grow to more than €500 million by 2025.

In its recently published 2021 Global Video Advertising Trends report, SpotX predicted growth this year in addressable TV, programmatic, supply path optimisation, and data-layered campaigns. It noted that in 2021 programmatic budgets will surge with the rise in connected TV (CTV) streaming, as well as advancements in addressable technology that are finally bringing linear inventory into digital buying workflows.