Adtech company OpenX is exploring a possible sale, sources say
- OpenX, a supply-side ad platform, is exploring a potential sale, sources told Insider.
- The company has appointed Goldman Sachs to handle the process, one of those people said.
- A sale would add to the flurry of recent deal activity in adtech.
- See more stories on Insider’s business page.
Adtech company OpenX is exploring a potential sale, according to two sources familiar with the plans.
The Pasadena, California-based supply-side platform — which offers ad-exchange technology to help publishers and developers sell ads on their websites and apps — is working with Goldman Sachs on the process, one of those people said.
An OpenX company spokesperson said the company doesn’t comment on “market rumors or speculation.” Goldman Sachs declined to comment.
OpenX operates in a highly competitive space. In addition to Google’s ad exchange, it competes against the likes of AT&T-owned Xandr, Yahoo, Magnite, PubMatic, and Index Exchange.
Any transaction would mark the latest in a flurry of deal activity in the adtech sector. There were 21 adtech mergers and acquisitions in the first quarter of this year, according to investment bank LUMA Partners. That was up from 11 adtech transactions in the prior quarter and just seven in the year-ago quarter.
Among its direct competitors, OpenX rival PubMatic went public in December and is trading at a market valuation of $1.5 billion. Magnite, previously known as Rubicon Project, recently acquired RTL Group’s SpotX in a $1 billion-plus deal and has a market cap of around $3.8 billion.
OpenX navigated a tumultuous 2020. At the turn of the year, the company’s cofounder and CEO Tim Cadogan left to become chief executive of fundraising platform GoFundMe. He was replaced by longtime OpenX executive John Gentry. Chief Product Officer Todd Parsons also left last year, for adtech firm Criteo.
In April 2020, OpenX laid off, furloughed, or cut hours for 15% of its staff, which Gentry said at the time was due to an expectation that that coronavirus pandemic would cause marketers to cut their spend. The ad market — and particularly digital advertising — soon sprang back to life. Ad-funded tech giants posted giant earnings last year and adtech stocks soared amid the rise in digital content consumption and consumer shift to e-commerce.
Founded in 2008, OpenX has raised $70.5 million from investors including SAP Ventures, Accel Partners, Index Ventures, and Samsung Ventures, according to Crunchbase.
As for where OpenX might end up, four industry sources speculated that a likely home could be with a private-equity buyer who could merge the company with other complementary adtech assets in a rollup.
PE firms have shown an increasing interest in the space. PE buyers made up 46% of M&A transactions in the tech, digital, media, and marketing space in the first quarter of 2021, according to advisory firm Ciesco. That figure was up from 36% in the year-ago quarter.
OpenX previously tried to find a buyer in 2015, Insider reported. The company, which employed around 200 people as of last year, said it was profitable and recorded $172 million in net revenue in 2017 but hasn’t released annual financial figures since.
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