Outbrain is acquiring Teads from Altice for $1 billion. The deal includes $725 million in cash upfront, a deferred $25 million cash payment, and 35 million shares of Outbrain stock valued at $169 million. This acquisition is seen as a merger to create an "end-to-end, full-funnel platform for the open internet," according to Outbrain CEO David Kostman.
Acquisition Details
- Buyer: Outbrain
- Seller: Altice
- Price: $1 billion
- $725 million in cash upfront
- $25 million deferred cash payment
- 35 million shares of Outbrain stock valued at $169 million
- Leadership Post-Acquisition:
- David Kostman, CEO of Outbrain, will lead the combined company.
- Bertrand Quesada and Jeremy Arditi, co-CEOs of Teads, will serve as co-presidents.
Strategic Goals
Outbrain aims to expand beyond its traditional content recommendation model into the more lucrative connected TV (CTV) and video advertising spaces. The acquisition of Teads, which specializes in SSP and video monetization, will help Outbrain:
- Access TV and video publishers.
- Move away from the "chumbox" category.
- Reach more than 2 billion consumers per month.
- Expand into upper-funnel advertising.
- Distance itself from made-for-advertising (MFA) publishers.
Altice follows other telcos like Verizon and AT&T in exiting the ad tech space. Altice originally bought Teads in 2017 for $307 million, aiming to leverage its first-party subscriber data for incremental revenue. However, the strategy has shifted under Outbrain's ownership.
Outbrain, with a market cap of $231 million as of March, secured financial backing from Goldman Sachs, Jefferies, and Mizuho Bank, including a $100 million revolving credit facility to fund the deal.
Benefits of Acquisition
- For Outbrain:
- Diversification into CTV and video advertising.
- Potential to attract higher-paying advertisers.
- Enhanced brand affinity and customer value through TV and video reach.
- For Teads:
- Integration with Outbrain's performance-based marketing tactics.
Combined, Outbrain and Teads will have over 2,000 employees, positioning them strongly in the ad tech market.
