Mediaocean acquires Innovid for $500M, delisting it from the NYSE
Mediaocean acquires Innovid for $500M, delisting it from the NYSE
The valuation reflects a premium of just over 100% on Innovid's current stock price on Wall Street but falls significantly short of the $1.3 billion valuation achieved during its 2021 SPAC merger.
Innovid, the Israeli digital advertising company, will be sold to U.S.-based Mediaocean and subsequently delisted from the New York Stock Exchange, three years after its initial public listing. Mediaocean, a private company whose largest shareholder is the CVC investment fund, will pay Innovid shareholders $3.15 per share. This values Innovid at $500 million.
Street but falls significantly short of the $1.3 billion valuation achieved during its 2021 SPAC merger.
Since its public debut, Innovid's stock has suffered significant declines, losing about 90% of its value. However, the deal benefits key stakeholders, including the Israeli investment firm ION, which spearheaded the SPAC merger, and Innovid's founders: CEO Zvika Netter, Tal Chalozin and Zack Zigdon.
Although Innovid is registered as a U.S. company, it employs 470 people, including 100 in Israel. “This is a positive event for employees, but it must be viewed through the lens of 2024, not 2021,” said Netter in a conversation with Calcalist.
While Innovid's valuation no longer qualifies it as a "unicorn," its outcome is considerably better than that of other SPAC companies like Otonomo and Selina, which faltered post-listing.
Founded in 2008, Innovid raised $100 million from investors such as Sequoia Capital and Genesis Partners before its IPO. In its SPAC merger, fueled by the surge in digital advertising during the pandemic, Innovid raised $251 million. A significant portion of this was used to acquire a British company for $160 million, including $100 million in cash.
Innovid’s platform specializes in digital advertising for smart TVs, serving clients like Procter & Gamble globally. Following the acquisition, Innovid will merge into Mediaocean’s subsidiary, Flashtalking, with Netter set to serve as its CEO. The merger aims to capitalize on a shifting digital advertising landscape, partly driven by the ongoing antitrust trial against Google and regulators’ attempts to loosen Google’s dominance in the sector. Innovid’s platform competes directly with Google’s Campaign Manager 360 solution.
“The timing of this transaction is no coincidence,” said Netter. “The Google trial, even if it doesn’t lead to a breakup, has created a tremendous market opportunity. For years, we’ve highlighted Google’s near-monopoly as both a media player and an infrastructure provider.” MediaOcean plans to expand Innovid’s capabilities into banners and social media campaigns.
Innovid is significantly smaller than Mediaocean, which employs over 1,000 people and generates $500 million in annual revenue. Innovid ended Q3 2024 with $38 million in revenue, reflecting modest growth of 6%. However, it has shown profitability for several quarters, closing Q3 with a net profit of $4.7 million compared to a $2.7 million loss in the same period last year.
For 2024, Innovid is expected to report $150 million in revenue while continuing to improve profitability and cash flow. Reflecting on the IPO experience, Netter noted, “Becoming a public company taught us valuable lessons. While the IPO may have been premature and driven by hype, it pushed us toward efficiency and profitability to meet market demands.”
