First announced in September 2017, acquisition of its US rival has commenced today.

Companies: Rhythmone, YuMe


RhythmOne (LON: RTHM) has commenced takeover proceedings of rival company YuMe exactly 4 months to the day after the $185m takeover was first announced.

 

The San Franciso-based, London-listed Adtech company said in its September announcement the merger would "create one of the largest independent digital video advertising marketplaces". 

 

The exchange offer, which is being made by a wholly-owned subsidiary of Rhythmone, will see YuMe shareholders receive $1.70 in cash plus 0.75 shares in RTHM per share. The deal is expected close sometime this quarter.

 

The board noted in September the acquisition of the video advertising company also based in California accelerates their strategy "to build a unified programmatic platform with unique audiences of differentiated quality, at scale."

 

The acquisition is seen as another example of consolidation in the ad tech industry, which is largely fragmented outside the realms of Google and Facebook due to a number of factors in which we delved into last year.

 

The industry is slowly aligning, however, proven by the RTHM/YuMe merger as well as other recent deals, included the Taptica acquisition of AreaOne in 2016.

 

RTHM shares have been falling since May 2017, with news of the acquisition having little impact on its downward spiral. 

 

Shares have, however, climbed 4% this morning off the back of news that takeover proceedings have commenced. Today's current price of 285p is well below its 2017 high of 485p.

 


The information contained within this post is based on personal experience and opinion and should not be considered as a recommendation to trade nor financial advice.