Magnite (NASDAQ:MGNI) has announced that it is acquiring SpotX as it prepares to beef up its connected TV (CTV) services and MGNI stock is soaring on the news.

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Here’s everything potential investors in MGNI stock need to know ahead of the deal’s closing.

• Magnite and SpotX are both advertising services for CTV.
• CTV covers any device that can hook up to the internet and stream video.
• That means smart TVs, as well as mobile devices, game consoles, and set-top boxes.
• Magnite plans to spend $1.17 billion to acquire SpotX from RTL Group.
• It will be doing so with a mix of cash, shares of MGNI stock, and debt secured from Goldman Sachs (NYSE:GS).
• This will have it paying $560 million in cash and issuing 14 million shares of its stock to RTL Group.

• Magnite is expecting the deal to result in $35 million in run-rate operating cost synergies.
• More than half of those synergies should be realized within the first year after the deal closes.
• MGNI also notes that the combined company would have reported non-GAAP net revenue of $350 million for the full year of 2020.
• The two companies are expecting the deal to close in the second quarter of 2021.
• Magnite says that it will provide additional details of the deal during its upcoming Q4 earnings report.
• It will release this earnings report on Feb. 24.

MGNI stock was up 20.9% as of Friday morning.

On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.