RTL Group said Thursday that it has agreed to buy a 65 percent stake in SpotXchange for $144 million. RBC Capital Markets advised SpotXchange on the transaction. The deal is expected to be completed by the end of August. Based in Denver, SpotXchange is a video advertising platform. Its backers include H.I.G. Growth Partners.
LUXEMBOURG & DENVER–(BUSINESS WIRE)–RTL Group, the leading European entertainment network, today announced that it has signed a binding agreement with the current shareholders of SpotXchange, Inc. to acquire a 65 percent majority stake in the Denver-based video advertising monetization company. In addition to RTL Group’s initial investment US-$144 million (€107 million), the parties agreed on an earn-out component that might increase the initial consideration subject to the future performance of SpotXchange. Under the terms of the deal, RTL Group also has the opportunity to acquire the remaining shareholding in the future.
The deal is subject to US competition authority approval and is expected to close by the end of August 2014. The investment is the next step of RTL
Group’s strategy to become a leading player in all segments of online video and online video advertising. RTL Group becomes the first major broadcaster to invest in the rapidly growing market of programmatic online video advertising.
Founded in 2007, SpotXchange was the first online advertising marketplace with an exclusive focus on video. Today, SpotXchange provides a comprehensive video advertising monetization platform to hundreds of publishers around the globe such as The Atlantic, Hearst Corporation, Meredith Video Studios, Mail Online, NDN and Adaptive Media who use the platform to maximize revenue for their desktop, mobile and connected TV video advertising inventory while driving down operational costs. SpotXchange empowers publishers and their sales teams to operate in an ever increasingly complex digital ecosystem by providing innovative and industry-leading programmatic technologies that yield unprecedented transparency, insights and control over the buying behavior of today’s leading brands. Over one billion auctions for video advertising impressions are transacted through the SpotXchange platform daily, with ads delivered to 335 million people in over 100 countries per month. The company currently has 180 employees with headquarters in Denver, Colorado, and offices in several US and international locations. SpotXchange’s current investors include H.I.G. Growth Partners, the dedicated growth capital investment affiliate of H.I.G. Capital.
Online video advertising is currently the fastest growing digital advertising segment, expected to grow globally at a Compound Annual Growth Rate (CAGR) of 24 percent between 2014 and 2018. This growth is driven particularly by programmatic video advertising which is estimated to increase from US-$2.7 billion in 2013 to US-$15.4 billion in 2018 worldwide (CAGR: +42 percent).
Joint statement of Anke Schäferkordt and Guillaume de Posch, Co-CEOs of RTL Group: “Following our investments in non-linear TV services and in multi-channel networks on Youtube, RTL Group has already become the leading European media company in terms of online video views. The logical next step in our strategy is a structural move into the area of digital monetization – improving our skills by adding innovative data- and technology-based competencies. SpotXchange is the perfect fit for RTL Group for such a move: it has a first-class management team that has built a leading, state-of-the-art platform for programmatic selling of online video advertising. With its impressive growth story and strong positioning in the United States, SpotXchange also represents a unique opportunity to enhance RTL Group’s presence in the world’s biggest and most advanced media market.”
Joint statement from the two co-founders of SpotXchange, Michael Shehan (CEO) and Steve Swoboda (COO and CFO): “We are thrilled to be joining the RTL Group, a global leader in media and entertainment, and believe they are the ideal partner to help SpotXchange expand the reach of our comprehensive video ad monetization services. This investment demonstrates RTL Group’s progressive vision and embrace of programmatic trading, ad serving and yield optimization in the digital arena. The companies comprising RTL Group operate in a decentralized fashion which will allow SpotXchange to thrive and grow as the last independent digital video ad monetization platform while providing significant opportunities through partnership with RTL Group’s leading European broadcast companies and top tier global content producers. Joining RTL Group will present incredible benefits and opportunities for SpotXchange’s publishers, buyers and people.”
Under the terms of the transaction, RTL Group will appoint three of five members of the Board of SpotXchange. Michael Shehan and Steve Swoboda will continue to manage the day-to-day operations of the company, reporting to its Board.
RTL Group and the management team of SpotXchange have developed a joint growth plan to keep SpotXchange on its current growth path in the US and Asian-Pacific region, while simultaneously focusing on an accelerated roll-out in Europe.
RBC Capital Markets acted as financial advisor to SpotXchange in connection with the transaction.
About RTL Group
RTL Group is the leading European entertainment network, with interests in 53 television channels and 27 radio stations and content production throughout the world. The television portfolio of Europe’s largest broadcaster includes RTL Television in Germany, M6 in France, the RTL channels in the Netherlands, Belgium, Luxembourg, Croatia, Hungary and Antena 3 in Spain – the company also operates the joint venture channels RTL CBS Entertainment HD and RTL CBS Extreme HD in Southeast Asia. RTL Group’s families of TV channels are either the number one or number two in eight European countries. The Group’s flagship radio station is RTL in France, and it also owns or has interests in other stations in France, Germany, Belgium, the Netherlands, Spain and Luxembourg. RTL Group’s content production arm, FremantleMedia, is one of the largest international creators, producers and distributors of multi-genre content outside the US. With operations in 22 countries, FremantleMedia’s comprehensive global network is responsible for 8,500 hours of programming a year and distributes over 20,000 hours of content worldwide. Combining the catch-up TV services of its broadcasters, the newly acquired multi-channel network BroadbandTV and FremantleMedia’s more than 150 Youtube channels, RTL Group has become the leading European media company in online video. For more information, please visit RTLGroup.com and follow RTL Group on Twitter @rtlgroup.
SpotXchange is the trusted video advertising platform offering premium publishers holistic yield management in order to maximize revenue for desktop, mobile and connected TV inventory while driving down operational costs. Publishers leverage SpotXchange’s programmatic technology, modern ad server and private marketplace capabilities to operate effectively in an increasingly complex digital ecosystem while gaining unprecedented transparency, insights and control over the buying behavior of today’s leading brands. Over one billion auctions for video advertising impressions are transacted through the SpotXchange platform daily, with ads delivered to 335 million people in over 100 countries per month. Headquartered north of Denver, SpotXchange has offices in New York, San Francisco, London, and Sydney and is consistently a top 5 comScore video property for video ads served. For more information, please visit SpotXchange.com and follow SpotXchange on Twitter @SpotXchange.