Rubicon Project and Telaria today announced an agreement to combine in a stock-for-stock merger. Rubicon Project and Telaria are listed in the New York Stock Exchange: NYSE:RUBI and NYSE:TLRA.
Upon closing, Telaria stockholders are expected to own approximately 47.1% and Rubicon Project stockholders are expected to own approximately 52.9% of the fully diluted shares of the combined company.
According to Rubicon Project, the merge of the 2 companies will create the world’s largest independent sell-side advertising platform, poised to capture the growth in Connected TV (CTV).
Telaria is a leader in Connected TV, and Rubicon Project is an expert in programmatic operations. Rubicon Project is headquartered in Los Angeles, California, while Telaria is headquartered in New York. Combined, the new company will have over 600 employees and contractors in 19 cities in 11 countries.
“Our businesses are highly complementary, and when combined, are a powerful, strategic alternative to the walled gardens, which have been frustrating both buyers and sellers due to their lack of transparency, innovation bottlenecks, and conflicted business models,” stated Telaria CEO, Mark Zagorski. “The two companies will provide more technology resources, a broader geographic footprint and deeper financial assets to attack the growing opportunity created by the shift from linear viewing to CTV to the benefit of our customers and in support of a thriving open internet. For our stockholders, we believe this merger allows us to accelerate our growth, while providing additional resources to increase investment and continue to scale our industry-leading CTV technology. For our employees, this is an opportunity for development and to fully realize the potential of what we have built these past few years in a scaled, omnichannel platform.”
Upon closing, Michael Barrett (Rubicon Project) will be named Chief Executive Officer of the combined company, Mark Zagorski (Telaria) will be named President & Chief Operating Officer and David Day will be the Chief Financial Officer. Telaria board member Paul Caine will be Chairperson of the Board of Directors of the combined company. The full board will consist of nine members; four existing directors from each company and Michael Barrett, CEO.
The transaction is expected to close in the first half of 2020.
What Michael Barrett said today during the webcast
Mark and I are pleased to announce that we have entered into a definitive agreement to combine Rubicon Project and Telaria in a stock-for-stock merger. The transaction has been unanimously approved by the Boards of Directors of both companies.
The combination of Rubicon Project and Telaria creates the world’s largest, independent sell-side advertising platform. It will provide programmatic buyers and sellers with a single place for transacting CTV, web, traditional video, audio and mobile advertising inventory unmatched by any other independent exchange.
On top of strengthening the depth in formats we serve, there are numerous key strengths that this combination creates to create significant separation from our programmatic competitors. This is driven by the massive scale of volume we serve, literally hundreds of billions of daily ad requests, to our speed of execution, to our efficiency, to our low cost unit economics, to our data science and our ID initiatives, just to name a few.
This transformative combination builds on our commitment to trust and transparency and accelerates our strategy to provide buyers and sellers with the most efficient paths to every format and channel including CTV. We could not be more excited about the future as we bring together two industry leaders with strong businesses, complementary technical assets and incredible cultures to create a market leader in the industry that will generate significant opportunities for our employees, customers, partners and stockholders.
From the Rubicon Project perspective, despite having a solid video business and a small but rapidly growing CTV business, we were looking at a meaningful investment over an uncertain period of time to position us to effectively and aggressively compete for share in the CTV market with Telaria, SpotX and Freewheel. It is not news to anyone that CTV is an exciting growth opportunity in the digital programmatic market and we’re happy to take on the opportunity in combination with an industry leader with greater scale together than we could separately. We believe it’s just a matter of time before video is more than half of the combined company’s revenues and CTV will be the strongest long term driver.
For the past 2 years, I’ve talked about our 3 key growth drivers – SPO, video and Demand Manager. This transaction reshuffles which will be our largest growth driver but doesn’t change our view that each will drive meaningful future revenue growth for the business.
In fact, we think adding to the video offerings, specifically CTV, is extremely complementary to SPO and Demand Manager.
In SPO, we’ve seen DSPs, agencies and buyers treat CTV differently and retain most key CTV players, outside of the omni-channel sell side platforms, which we believe positions us even stronger in this process over the next 12-18 months.
In the long run, we also see a path to CTV and broader video being sold via header bidding, more specifically in Prebid, and believe the strength that we bring in serving the developing market today as it becomes more mainstream in header bidding allows us to cover the entire market opportunity.
We are very pleased to have come through the challenges presented when I joined nearly 3 years ago now and begin playing offense and bolstering the long term strategic value proposition of Rubicon Project. We were able to organically take a challenged business and restore it to a healthy, growing business with solid financial performance, which provided the opportunity for a transaction like the one we announced today.
M&A has played an important part of our turnaround and differentiation since I joined Rubicon Project – buying nToggle in mid 2017, followed by RTK last quarter and now a game-changing merger with Telaria, which transforms our long term strategic prospects. The enhancement of our revenue growth prospects, combined with the financial discipline we’ve demonstrated historically, makes me very excited about our company’s future.
Before handing over to Mark, I want to highlight that outside of the obvious leadership position Telaria has in CTV, I’m very excited about the combined prospects in web video and adding a great team of people with great strategic relationships.
With that, I will hand things over to Mark, who will assume the role of President and Chief Operating Officer upon closing of the transaction, to share some of his thoughts about today’s deal.
What Mark Zagorski said today during the webcast
This transaction is a great deal for both of our shareholders and is an exciting strategic opportunity for both companies. Together, we will have more technology resources, a broader geographic footprint and deeper financial assets to go after the opportunities that exist in digital advertising.
This merger allows us to accelerate our growth, while providing additional resources to increase investment and continue to scale our industry-leading CTV technology.
We are two category leaders combining strengths to form the largest independent sell side advertising platform. Telaria is a proven leader in CTV.
We have led innovation in the space which has resulted in us partnering with the most premium CTV publishers around the globe. Rubicon Project brings their technical expertise in high speed, high-volume transactions across the entire digital advertising ecosystem. The powerful suite of technology assets that will result from the combined entity will enable us to further broaden and deepen our relationships with publishers, create additional differentiation from our industry peers and help both companies grow share as an independent, transparent and unconflicted alternative to the walled gardens.
As more consumers cut the cord, more CTV content becomes ad-supported and more CTV publishers embrace programmatic technology, our prospects for continued growth are strong.
I’m very excited to add the capabilities that Rubicon Project brings to our combination. Our go to market approach now includes all formats to serve publisher and buyer needs across all platforms. A great example of where we have opportunities to leverage a broader set of solutions is in the APAC region where Telaria has traditionally had a strong CTV and video position. We will now have the ability to offer a complete set of solutions to complement our relationships in that market and others around the globe.
Before I hand the call over to David Day, I would also like to add that we are really excited about bringing the complementary cultures together into one unified force. Both companies have been pioneers in their respective spaces and embody the true spirit of the open internet. Bringing them together will provide a formidable alternative to the market and provide benefits to buyers, sellers and consumers of digital advertising, while delivering bottom line results and helping to enhance shareholder value.