The merger of The Rubicon Project and Telaria last summer into what is now Magnite (NASDAQ: MGNI) has been a boon for shareholders. The sell-side advertising platform 's share prices have been off to the races (up more than 700% over the last six months alone) as the streaming-TV movement reaches a frenzy. Old linear TV services are quickly migrating to the modern standard, and Magnite's connected-TV (CTV) segment is having a heyday as a result.
Riding high on this strength, Magnite went shopping and recently announced it's acquiring SpotX from European media conglomerate RTL Group for $1.17 billion. Now that's how you use surging stock price strength to your advantage.
Magnite will be paying for SpotX with $560 million in cash (some cash from its balance sheet, which totaled $104 million at the end of Q3 2020 and the rest via financing provided by Goldman Sachs ) and 14 million shares of Magnite. At the time of the announcement, it valued SpotX at $1.17 billion, although the 14 million in new stock is worth more than it was prior to the deal's reveal. As of this writing, Magnite shares were up some 35% since the news was released , boosting the company's total market cap to $7.1 billion. Nevertheless, using its skyrocketing stock as a type of currency will help the company manage its balance sheet, all the while yielding it a new asset.
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Magnite Builds on Its Connected-TV Momentum With a $1.17 Billion Acquisition