RTL Group announced that it has signed a binding agreement with the current shareholders of SpotXchange to acquire a 65 per cent majority stake in the Denver-based video advertising monetisation company. Online video advertising is currently the fastest growing digital advertising segment, expected to grow globally at a Compound Annual Growth Rate (CAGR) of 24 per cent between 2014 and 2018.
In addition to RTL Group’s initial investment of US-$144 million (€107 million), the parties agreed on an earn-out component that might increase the initial consideration subject to the future performance of SpotXchange. Under the terms of the deal, RTL Group also has the opportunity to acquire the remaining shareholding in the future.
The deal is subject to US competition authority approval and is expected to close by the end of August 2014. The investment is the next step of RTL Group’s strategy to become a leading player in all segments of online video and online video advertising. RTL Group becomes the first major broadcaster to invest in the rapidly growing market of programmatic online video advertising.
Founded in 2007, SpotXchange was the first online advertising marketplace with an exclusive focus on video. Today, SpotXchange provides a comprehensive video advertising monetisation platform to hundreds of publishers around the globe such as The Atlantic, Hearst Corporation, Meredith Video Studios, Mail Online, NDN and Adaptive Media who use the platform to maximise revenue for their desktop, mobile and connected TV video advertising inventory while driving down operational costs.
A joint statement from the two co-founders of SpotXchange, Michael Shehan (CEO) and Steve Swoboda (COO and CFO) reads as follows: “We are thrilled to be joining the RTL Group, a global leader in media and entertainment, and believe they are the ideal partner to help SpotXchange expand the reach of our comprehensive video ad monetisation services. This investment demonstrates RTL Group’s progressive vision and embrace of programmatic trading, ad serving and yield optimisation in the digital arena. The companies comprising RTL Group operate in a decentralised fashion which will allow SpotXchange to thrive and grow as the last independent digital video ad monetisation platform while providing significant opportunities through partnership with RTL Group’s leading European broadcast companies and top tier global content producers. Joining RTL Group will present incredible benefits and opportunities for SpotXchange’s publishers, buyers and people.”