In a deal that highlights the growing importance of programmatic advertising technologies, Yahoo has announced that it has inked a definitive agreement to acquire BrightRoll.
Yahoo is paying about $640 million in cash for BrightRoll, which runs a major programmatic video advertising platform.
The acquisition will strengthen Yahoo’s advertising capabilities by combining Yahoo's desktop and mobile video advertising inventory with BrightRoll's programmatic video platform and publisher relationships, the companies reported.
Yahoo also noted that “BrightRoll is a large, growing and profitable business with net revenues expected to exceed $100 million this year” and that the transaction enhances its EBITDA.
BrightRoll currently works with many of the world’s largest brands and agencies in the digital video advertising sector, including 87 of the Ad Age Top 100 U.S. advertisers, all of the top 15 advertising agencies, and all 10 of the leading demand-side platforms.
In announcing the deal, Yahoo cited comScore data showing that BrightRoll served more video ads and reached more consumers in the U.S. in 2014 than any other platform.
“Video, along with mobile, social, and native, is driving a surge in digital advertising,” explained Marissa Mayer, Yahoo CEO in a statement. “Here at Yahoo, video is one of the largest growth opportunities, and BrightRoll is a terrific, strategic and financially compelling fit for our video advertising business…This acquisition will accelerate the growth of both companies - we can help BrightRoll scale to even more advertisers globally and they can bring their tremendous platform offering to Yahoo's advertisers. The combination builds positive momentum for Yahoo's broader display advertising business in 2015."
Yahoo expects the deal to close in the first quarter of 2015.
Once the deal is completed, Yahoo noted that BrightRoll will continue to offer its current suite of products and services and that they will retain BrightRoll’s team of approximately 400 employees.