British online advertising company RhythmOne and Silicon Valley based YuMe have both separately confirmed that they have entered talks concerning a potential buyout. Following press speculation, RhythmOne released a statement on Monday verifying their interest in purchasing YuMe, though it cautioned that “given the nature of the discussions, there can be no certainty that any transaction will proceed.”
YuMe followed suit hours later, stating “YuMe confirms that it is in discussions regarding a potential transaction with RhythmOne,” though it, too, warned that the talks may come to nothing. “As previously announced Yume has been engaged in a strategic process in which Yume continues to consider several value enhancing initiatives, including remaining as a stand-alone company.”
The “strategic process” mentioned in YuMe’s statement comes after a difficult period for the ad tech company during which stock prices fell from a high of over $11 in 2013 to below $3 in 2015. Since the strategic alternatives process began, YuMe CEO Paul Porrini has displayed confidence that his company is on the up, telling investors earlier this month that 2017 saw a period of “rapid growth and adoption” and that YuMe is “well-positioned to capture additional ad spend through our programmatic offering.”
RhythmOne has also faced its share of struggles in the past. Previously trading as Blinkx, it’s share prices plummeted in 2014 after a damaging blog post by Harvard Professor Benjamin Edelman accused the company of ad fraud. In the graph below you can see how the company’s share price has declined since Edelman’s article was published:
However, the rebranding to RhythmOne was part of a concerted effort to fix its reputation, and the company achieved a number one ranking Pixalate’s on ‘Global Seller Trust Index’ earlier this year.
The market seems positive that a deal could be beneficial for all parties, with stock prices for both companies rising in light of the announcement.