What Will Drive the Next Wave of M&A in Mar Tech?

After a relatively quiet 2018, last year was a pretty boisterous party for mar-tech mergers and acquisitions.

Driven by legacy television players, like AT&T, eager to get ahead of the fast-emerging connected TV sector and midmarket players pooling their fortunes, Luma Partners found, the number of media and mar-tech deals jumped to 351 in 2019, up from 258 the previous year.

With the calendar flipping to a new year, some execs are hoping brands eager to future-proof themselves against digital native interlopers will spur similar exits in the 2020s.

Luma’s report also showed how the period was notable for the number of ad-tech exits in excess of $100 million (five in total in 2019) compared with the previous year when there was only one such deal. These include Roku’s purchase of video-focused demand-side platform Dataxu in a deal worth $150 million, Taboola and Outbrain’s merger in a deal that values the combined entity at $850 million and the $178 million merger of Taptica with RhythmOne (aka Tremor International).

A tale of mixed fortunes

However, while the period was characterized by such big-ticket deals, there were arguably just as many fire sales, such as the sell-off that followed Sizmek’s Chapter 11 filing in early 2019. The past 12 months witnessed several other high-profile ad tech casualties, and it can be argued regulation, and the specter of coming regulation, has sped up the the ad-tech shakeout.

Luma Partners vp Conor McKenna observed that while the total volume of deals was driven by “capitulation sales” there were also some impressive exits.

“That said, 2019 saw the largest number of scaled ad-tech transactions—those over $100 million—of the last three years, with considerable momentum at the end of the year,” he said.

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