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Altice acquires ‘outstream’ ad leader Teads in €285m deal

teadsAltice is to acquire leading video advertising market-place provider Teads in a deal that values the latter at €285 million n a cash and debt-free basis.

Teads is credited as the inventor of ‘outstream’ video advertising – the native video ad format that automatically plans whenever a web user navigates near it while reading a text-based article. The format is distinguished from ‘instream’ video which typically plays pre-roll or post-roll a video publisher’s content. Use of the format is growing rapidly, reacting video inventory that did not exist previously.

Altice said that acquisition would help it deliver data-driven, audience-based advertising solutions on multiscreen platforms including TV, digital, mobile and tablets.

Publishers are working with Teads to create new video inventory and manage their existing inventory, monetizing it through their own sales force, Teads sales force, or programmatic buying, according to Altice.

Pierre Chappaz

Pierre Chappaz

The acquisition purchase price is subject to Teads achieving certain revenue targets in 2017. 75% of the acquisition purchase price will be due at closing. The remaining 25% earn-out is subject to Teads’ 2017 revenue performance and will become payable in early 2018.

Teads revenue grew by 44% in 2016 to an estimated €187.7 million. The company claims to have relationships with 94 of the top 100 advertisers globally and has partnerships in place with8 over 500 premium publishers and over 8,000 specialised publishers.

The senior management of Teads, including executive chairman Pierre Chappaz and CEO Bertrand Quesada, will continue to lead the business going forward and have agreed to reinvest a significant portion of their proceeds. Chappaz will join Altice’s Management Board responsible for all of its advertising activities.

Bertrand Quesada

Bertrand Quesada

The acquisition is subject to regulatory approval and is expected to close in mid-2017.

Teads had previously indicated that it envisaged developing independently and at one point was reportedly considering an IPO. More recently it was rumoured that a sale to News Corp could be in the offing.

Michel Combes, CEO of Altice, said: “Convergence of telecoms, content, and advertising is at the core of our business. There is significant incremental value to be generated from our assets. Teads, a powerful business in itself, with major presence in Altice footprint notably in the US and France, will enable us to offer a truly unique value proposition to brands and agencies on the one hand and the media industry, programmers and distributors on the other. It is that value proposition – data-driven, measurable and multiscreen – which will enable us to significantly grow our advertising business. We are very excited to partner with Pierre, Bertrand and their talented team.”

Chappaz said: “We are excited to start this new phase of Teads and become part of the internationally renowned Altice team. Since our inception we have strived to offer our clients with superior advertising solutions based on measurable performance and technological innovation. As part of Altice, we will be able to offer even more tailored, data-driven solutions and take our value proposition from the digital world to a multiscreen platform, which includes TV, digital, mobile and tablets. It is this differentiated offering which will allow Altice and Teads to uniquely prosper in the global advertising market.”