The deal would see Taptica shareholders take a 50.1 percent stake of the new company, while RhythmOne shareholders would own the rest. Having formally announced its intentions, Taptica now has until February 26th to make an offer, though Sky reports a deal could be struck as early as this week.
RhythmOne said the combination of the two businesses would create “one of the leading video advertising companies in the US”. Both companies specialise in video advertising – RhythmOne started its life handling digital video search and says it specialises in advanced TV advertising, while Tremor has become more video-focussed since its acquisition of Tremor Video DSP (demand-side platform) for $50 million back in 2017.
Both companies have also been active previously in buying up other ad tech vendors. Alongside the Tremor Video DSP deal, Taptica bought mobile ad company AdInnovation for $5.7 million in 2007, and Facebook marketing specialist AreaOne for $17 million in 2015. RhythmOne meanwhile picked up YuMe for $185 million in 2017, RadiumOne in 2017 for $22 million, and Perk.com in 2016 for $42.5 million.
RhythmOne said the aim of the deal would primarily be to create scale, and to better allow the merged entity to compete with industry leaders like. Sky cited unnamed sources saying that the two are specifically looking to take take on Google and Facebook, and that the merged company would generate revenues of around $700 million, half of which would come from video advertising.