Rubicon Project and Telaria merger to create 'world’s largest independent SSP'

Rubicon Project and Telaria are to merge to form what they claim will be the "world’s largest independent sell-side advertising platform".

The two adtech vendors have entered into a definitive agreement to combine in a stock-for-stock merger, a transaction which has been unanimously approved by the boards of directors of both companies.

Upon closing the agreement, Rubicon Project president and CEO Michael Barrett will become chief executive of the combined company, while Telaria CEO Mark Zagorski will be named president and chief operating officer. Rubicon Project CFO David Day will become CFO of the combined company. Telaria board member Paul Caine will be chairperson of the board of directors of the combined company, which will consist of nine members in total.

The combined company will create a "powerful, strategic alternative to the walled gardens", commented Zagorski, "which have been frustrating both buyers and sellers due to their lack of transparency, innovation bottlenecks, and conflicted business models".

“The two companies will provide more technology resources, a broader geographic footprint and deeper financial assets to attack the growing opportunity created by the shift from linear viewing to CTV to the benefit of our customers and in support of a thriving open internet," he added.

New York-based Telaria was formed in 2017 as a rebrand of Tremor Video, after the latter sold its demand-side business in 2015. The SSP is a connected TV specialist, powering Hulu's private marketplace. Los Angeles-based Rubicon Project was founded in 2007 and operates one of the world's largest ad exchanges. The combined company will offer a single platform for transacting CTV, desktop display, video, audio, and mobile inventory across all geographies and auction types.

Together, Telaria and Rubicon’s revenue in the year to September 30, 2019 grew 32% to US$217 million and will have around $150 million in cash and no debt, the companies said. The Rubicon Project’s market cap was at around $383 million before the market open on Thursday, while Telaria’s was around $350 million.

The combined company will have more than 600 employees and 11 offices across the Americas, EMEA and APAC.

Barrett said: “This transformative combination builds on our commitment to trust and transparency and accelerates our strategy to provide buyers and sellers with a single path to every format and channel including CTV. We could not be more excited about the future as two individually strong industry leaders with complementary assets and cultures come together to create a market leader that we believe will generate significant opportunities for our employees, customers, partners, and stockholders worldwide.”

The transaction is expected to close in the first half of 2020, but is subject to the receipt of required regulatory approvals and other customary closing conditions and the approval of stockholders of both companies.

Telaria stockholders are expected to own approximately 47.1% and Rubicon Project stockholders are expected to own approximately 52.9% of the fully diluted shares of the combined company.