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.
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.