Magnite Builds on Its Connected-TV Momentum With a $1.17 Billion Acquisition
The merger of The Rubicon Project and Telaria last summer into what is now Magnite (NASDAQ: MGNI) has been a boon for shareholders. The sell-side advertising platform's share prices have been off to the races (up more than 700% over the last six months alone) as the streaming-TV movement reaches a frenzy. Old linear TV services are quickly migrating to the modern standard, and Magnite's connected-TV (CTV) segment is having a heyday as a result.
Riding high on this strength, Magnite went shopping and recently announced it's acquiring SpotX from European media conglomerate RTL Group for $1.17 billion. Now that's how you use surging stock price strength to your advantage.
Magnite will be paying for SpotX with $560 million in cash (some cash from its balance sheet, which totaled $104 million at the end of Q3 2020 and the rest via financing provided by Goldman Sachs) and 14 million shares of Magnite. At the time of the announcement, it valued SpotX at $1.17 billion, although the 14 million in new stock is worth more than it was prior to the deal's reveal. As of this writing, Magnite shares were up some 35% since the news was released, boosting the company's total market cap to $7.1 billion. Nevertheless, using its skyrocketing stock as a type of currency will help the company manage its balance sheet, all the while yielding it a new asset.
Source Fool.com