Digital marketing platform Valassis acquired ad network MaxPoint for $95 million, the companies said Tuesday. Read the release.
Valassis itself was acquired by private equity firm Harland Clarke Holdings in 2013, and it will take the public company MaxPoint private.
“The acquisition of MaxPoint … will create greater strength in managing integrated media delivery campaigns for the world’s largest consumer products companies, retailers and agencies,” said Victor Nichols, CEO of Harland Clarke Holdings, in a statement. “This will result in operating efficiencies and deeper digital expertise that will provide more effective solutions for our global clients.”
Valassis hopes to bolster its cross-channel media-buying capabilities with MaxPoint’s location data.
“By joining together, we will create an expanded offering [for] digital and print campaigns while delivering targeted and measurable personalization at scale with stronger data and analytics,” said Cali Tran, President at Valassis Digital. “Our primary focus is on determining how best to capitalize on each other’s offerings.”
The acquisition is the latest in a spate of public ad tech companies that have been bought and taken private by PE firms in the past year.
Neustar was snapped up by PE firm Golden Gate Capital for $2.9 billion last December. After being acquired by Vector Capital for $122 million in August 2016, Sizmek bought Rocket Fuel for $145 million in July, taking it private. PE firm Vista Partners bought Marketo last spring.
Some PE firms buy ad tech assets and stitch them together in a way that could steal market share with the Google-Facebook duopoly. This strategy is what Vector is doing with Sizmek and Rocket Fuel.
Still, public companies that go private aren’t in great shape. Many do so to focus on revamping an outdated product road map without the prying eyes of Wall Street.
“Either the stock has to have been pretty badly beaten down in relation to cash flow or to the underlying market opportunity, or the PE group has to own or target other assets that they intend to combine and [gain] significant cost synergies from,” said Tolman Geffs, co-president of investment bank JEGI, in a previous interview with AdExchanger.
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MaxPoint’s stock tanked 56% after going public in 2015 for an intended $75 million, or $11 per share.
It’s unclear what synergies or redundancies exist between their respective technologies, what the integration process will look like and how long Valassis expects it will take. The acquisition is expected to close in Q4 of 2017.
