Digital ad software company Viant Technology Inc. (Nasdaq: DSP) is reportedly in talks to make what would likely be its largest-ever acquisition, with the Irvine-based firm eyeing rival ad firm MediaMath of New York City.
A deal could be reached in a matter of weeks, according to online media trade publication Digiday, which first reported on the potential deal.
Terms of the deal haven’t been disclosed. “The exact nature of the proposals on the table is unclear,” according to a Digiday report last week.
“Viant cannot provide comment at this time,” a company spokesperson said last week.
The Irvine-based company’s best-known acquisition to date was over a decade ago, when it bought social networking site Myspace.
DSP Pioneers
Both Viant and Digiday are among the better-known ad tech firms operating in the DSP or “demand side platform” space.
In the case of Viant, its DSP technology is “used by marketers and their advertising agencies to centralize the planning, buying and measurement of their advertising media across most channels,” it says.
MediaMath is known as one of digital media sector’s original DSPs, Digiday noted.
Its platform debuted in 2007, and at one time the privately held firm’s valuation was said to top $1 billion.
MediaMath’s valuation has since fallen. Last year, it announced a $150 million recapitalization that included a mix of new capital and a refinancing of existing debt. The 2022 deal saw Searchlight Capital Partners become the indirect majority owner of MediaMath.
Viant similarly has seen its value fall since going public in 2021, when it initially had a market cap in excess of $3.5 billion.
As of last week, its valuation was closer to $270 million.
Among the two DSP’s largest competitors in the ad tech space is Ventura-based Trade Desk Inc. (Nasdaq: TTD), which has a market cap more than $36 billion.
Liquidity Available
Proceeds raised from Viant’s 2021 initial public offering could help the company pull off a potential acquisition, officials said last month during Viant’s latest earnings call.
“We ended the quarter with $202 million in cash, which translates to a noteworthy $3.25 per share outstanding,” Chief Financial Officer Larry Madden told analysts in May. “We also had $223 million of positive working capital and no debt.
“To further strengthen our financial position, in early April we also upsized our existing credit facility from $40 million to $75 million, while also extending the term for five years,”
Madden said. “This solid financial foundation positions us extremely well to fully capitalize on the substantial market opportunity ahead of us.”
Since the IPO, “we’ve certainly considered M&A part of our strategy and we will continue to do that,” Madden told analysts last month.
“I think the market has generally started to reset in terms of valuations for private companies,” he said. They are “not all the way there but coming closer to kind of some of the valuations in the public markets,” he said.
“We will be opportunistic. We are looking.”
AI Focus
Another growing area of focus for Viant is AI and machine learning, which feeds into the company’s “vision of autonomous advertising,” CEO Tim Vanderhook told analysts last month.
“At Viant, we are focused on delivering products that automate the laborious and complex tasks, associated with using programmatic ad platforms,” Vanderhook said.
“Tasks like creating an ad campaign or ad format, selecting channel, device, publisher and ultimately bid prices for inventory, all of this can be streamlined and optimized through AI.
“Our AI-driven approach is poised to create substantial future revenue growth for Viant,” Vanderhook said.
Viant’s first-quarter revenue of $41.7 million was down about 2% year-over-year, though its gross profit increased 12%.
This quarter, the company expects revenue of $52 million to $55 million, representing a year-over-year increase of 4%.
