AOL Acquires Adap.tv For Approximately $405 Million In Cash And Stock Deal

AOL AOL is attempting to make its mark in online advertising by acquiring Adap.tv for roughly $405 million in a cash and stock deal. The deal solidifies AOL's place in online video advertising.

In the release, AOL described Adap.tv as, "the video advertising platform of choice for the world's largest brands, agencies, publishers and ad networks; a unified, programmatic platform that provides buyers and sellers with automated tools to plan, buy and measure across linear TV and online video, Adap.tv is transforming the way video advertising is bought and sold."

Deal Breakdown

Under the terms of the deal, AOL will pay $322 million in cash and roughly 2.3 million shares, or $83 million worth of stock. The boards of directors of both companies have approved the transaction, and the stockholders of Adap.tv have approved the transaction. AOL expects to close the acquisition in the third quarter of 2013.

"AOL is a leader in online video and the combination of AOL and Adap.tv will create the leading video platform in the industry," said Tim Armstrong, Chairman and Chief Executive Officer of AOL. "The Adap.tv founders and team are on a mission to make advertising as easy as e-commerce and the two companies together will aggressively pursue that vision."

“Two trends are prevalent in the video space right now – the movement from linear television to online video and the shift from manual transactions to programmatic media buying. Adap.tv is positioned squarely in front of the huge opportunity these trends are presenting,” said Armstrong.

“At Adap.tv, we are focused on building the most important business within the most important category in digital advertising,” said Amir Ashkenazi, CEO, Adap.tv. “We believe that most TV advertising will soon be traded programmatically on platforms like ours. The combination of AOL and Adap.tv accelerates our vision of efficient and effective TV and video advertising.”

AOL Shares Higher

AOL shares rose over 4 percent pre-market before paring gains slightly to 3.65 percent, trading $37.50 from Tuesday's close of $36.18. AOL shares were also higher on the back of a better than expected second quarter earnings report, where the company reported second quarter adjusted EPS of $0.46 vs. $0.32 expected on revenue of $541.3 million vs. $539.66 million.