RTL Group Takes Majority Stake in SpotXchange for $144M

/ Jul 31, 2014


European broadcaster RTL Group has acquired a majority stake in SpotXchange, a Denver-based provider of programmatic video advertising services for publishers.

Under the terms of the deal, for $144 million, RTL Group now owns 65% of SpotXchange, with performance-based earn-outs that could drive up the initial consideration. The broadcasting group also has the option to acquire the remaining 35% at a future date. The deal is expected to close by the end of August.

For RTL Group, the acquisition is positioned as “the next step” in its attempt to become a major player in all aspects of online video. Last year, the company pumped $36 million into YouTube-based multi-channel network BroadbandTV. Additionally, through its FremantleMedia subsidiary, the company is actively investing in the development, production, and distribution of digital video content.

“Following our investments in non-linear TV services and in multi-channel networks on YouTube, RTL Group has already become the leading European media company in terms of online video views,” said Anke Schäferkordt and Guillaume de Posch, co-CEOs of RTL Group in a joint statement. “The logical next step in our strategy is a structural move into the area of digital monetization… SpotXchange is the perfect fit for RTL Group for such a move.”

Consistently a comScore top-five property in the US, SpotXchange says it currently helps transact more than 1 billion auctions per day, with ads being delivered to 335 million people in over 100 countries per month. Its publishing clients include The Atlantic, Hearst, Meredith Video Solutions, Mail Online, and NDN.

While well-established and still looking to grow in the US, SpotXchange also wants to speed up its global expansion, something which RTL Group will be able to help with — particularly in Europe, said SpotXchange co-founders Mike Shehan and Steve Swoboda. “The companies comprising RTL Group operate in a decentralized fashion which will allow SpotXchange to thrive and grow as the last independent digital video ad monetization platform while providing significant opportunities through partnership with RTL Group’s leading European broadcast companies and top tier global content producers.”

As part of the deal, Shehan and Swoboda will continue to manage day-to-day operations at SpotXchange, reporting to five board of directors, three of whom will be appointed by RTL Group.

There has been a flurry of exit activity in the digital ad-tech space. In the past year, several companies have gone public, including Tremor Video, YuMe, and TubeMogul. Others have been acquired, such as Adap.tv (AOL), LiveRail (Facebook), and Flurry (Yahoo).

SpotXchange’s investors included HIG Growth Partners, an affiliate of HIG Capital.

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