Shares of online advertising platform Magnite (MGNI) jumped on Friday after it agreed to buy SpotX, a connected TV and video advertising platform, from RTL Group in a cash-and-stock deal valued at $1.17 billion.
Under terms of the deal, Magnite will pay $560 million in cash and issue 14 million of its common shares to RTL Group. The deal, which is slated to close in the second quarter, will be funded with cash on hand as well as committed financing from Goldman Sachs.
The company said it expects more than $35 million in run-rate operating cost synergies, with more than half expected to be realized within the first year of combined operations, according to a statement.
“Integrating SpotX into Magnite will make it easier for agencies and brands to reach premium CTV inventory at scale, with standard features and a single, addressable pool of audiences,” Magnite CEO Michael Barrett said in a blog post.
“After the deal closes, some of the leading programmers, broadcasters, platforms and device manufacturers that will rely on us to sell their inventory will include Discovery, Disney/Hulu, Fox, Roku, Sling TV, Tubi, ViacomCBS, Vizio and Vudu,” Barrett said.
The sale will let RTL, a division of media giant Bertelsmann SE that operates television and radio stations, re-focus its business on Europe, CEO Thomas Rabe said in a statement. RTL paid €230 million ($276 million) for SpotX, first investing in 2014 and taking full control three years later.
Shares of Magnite were up 9.15% at $47.47 in premarket trading on Friday. The stock has more than quadrupled in the past 12 months. Shares of RTL shares rose 6.33% to 46.72 euros in early Luxembourg trading on Friday.