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Roku to Sell Up to $1 Billion Stock Following Nielsen Deal

Roku reveals plans to sell up to $1 billion of its shares on the back of its  'strategic partnership' to acquire Nielsen’s video advertising business.

Roku  (ROKU) - Get Roku Inc. Report on Tuesday revealed plans to sell up to $1 billion of its shares in “at-the-market” offerings after it said it agreed to buy Nielsen’s  (NLSN) - Get Nielsen N.V. Report Advanced Video Advertising business - part of its long-term plan to boost its digital advertising revenue.

In a regulatory filing, Roku said it plans to sell up to $1 billion in stock and use the proceeds for “working capital and general corporate purposes, including sales and marketing, research and development, repayment of debt, capital expenditures and acquisitions or investments.”

Shares will be sold under a shelf registration, which was effective in March 2019, according to the filing.

That followed a separate announcement from Los Gatos, Calif.-based Roku on Monday that it has agreed to buy Nielsen’s Advanced Video Advertising business, which includes Nielsen’s video automatic content recognition and dynamic ad insertion technologies.

Roku and Nielsen will enter into a strategic partnership to integrate complementary Nielsen ad and content measurement products into the Roku platform and further advance Nielsen ONE, Roku said. Additional terms weren’t disclosed.

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Analysts took the news as positive, with Susquehanna Financial noting in a research note to clients that the deal “will accelerate the roll-out of dynamic ad insertion, something Roku is well positioned to achieve at scale given its significant smart TV market presence.”

The firm has a positive rating on the stock with a one-year price target of $530.

Other analysts have been singing Roku's praises, particularly after the video-streaming platform company posted a surprise fourth-quarter profit and gave an upbeat assessment of its future prospects.

At last check, shares of Roku were down 1.72% at $413.09. The stock has more than tripled in the past 12 months.

Shares of Nielsen were up 4.71% at $24.23.