AT&T to acquire digital ad platform startup AppNexus for $1.6 billion

AT&T announced Monday that it has agreed to acquire digital advertising platform startup AppNexus for $1.6 billion. The transaction, which is expected to close during the third quarter of 2018, is subject to customary closing conditions. Until the transaction closes, each company will continue to operate independently. The could bolster the telecom giant media content it needed to compete with Facebook amd Google for digital advertising dollars.

AppNexus was founded in 2007. Its cloud-based software platform enables and optimizes programmatic online advertising. Headquartered in New York City, the company has 23 offices in North America, Latin America, Europe, Asia and Australia. AppNexus has raised about $344 million and backed by Microsoft, Khosla Ventures, First Round Capital, Venrock,[10] Kodiak Venture Partners, Marc Andreessen, Ben Horowitz, and Ron Conway.

As part of the acquisition, AppNexus will become a part of AT&T advertising & analytics, led by Brian Lesser, CEO. AppNexus is a technology company that operates a leading global advertising marketplace and provides enterprise products for digital advertising – serving publishers, agencies and marketers.

With its proposed acquisition of AppNexus, AT&T is investing to accelerate the growth of its advertising platform and strengthen its leadership in advanced TV advertising. AppNexus has an experienced management team and employee base that includes more than 400 software engineers and product managers. This team brings leadership and vertical expertise in machine learning and predictive analytics, advertising technology and video.

“Ad tech unites real-time analytics and technology with our premium TV and video content,” said Lesser. “So, we went out and found the strongest player in the space. AppNexus has scale of infrastructure, advanced technology and diverse talent. The combination of AT&T advertising & analytics and AppNexus will help deliver a world-class advertising platform that provides brands and publishers a new and innovative way to reach consumers in the marketplace today.”

AT&T will continue to invest in and build on AppNexus’ foundational technology as it integrates with AT&T’s first-party data, premium video content and distribution. AT&T has more than 170 million direct to consumer relationships across its wireless, video and broadband businesses.1 AppNexus also extends AT&T advertising and analytics’ footprint globally, expanding into Asia-Pacific, Australia, Europe, and Latin America.

“Innovation is core to the heritage of both AT&T and AppNexus, and we have an exciting opportunity to chart the future course of advertising together,” said Brian O’Kelley, CEO, AppNexus. “Combining AT&T’s incredible assets with our technology, we will help brands and marketers power new advertising experiences for consumers. It’s what the market is asking for, and together we’re poised to deliver it.”

As the AppNexus platform is integrated across AT&T advertising & analytics, it will continue to build and bring new capabilities to market that will improve the value of AT&T’s robust ad-supported premium video content portfolio including Turner Networks, Audience Network, and Otter Media.

AppNexus is a global internet technology company. We operate the world’s largest independent marketplace for digital advertising and powerful enterprise technology for buyers and sellers of digital ads. Our scaled, real-time decisioning platform enables publishers to maximize yield and marketers and agencies to harness data and machine learning to deliver intelligent and customized campaigns.

Goldman Sachs & Co. LLC is serving as exclusive financial advisor to AppNexus. J.P. Morgan Securities LLC is acting as sole financial advisor to AppNexus’ selling stockholders.