Outbrain acquires Teads in $1 billion deal

Outbrain, a content recommendation platform, has officially acquired Teads, a video monetization company owned by European telco Altice. This deal marks the culmination of advanced negotiations between the two companies, first reported in July by Business Insider.

Key Points of the Deal
Deal Value: Approximately $1 billion, with Altice receiving $725 million upfront cash, $25 million deferred cash, and 35 million shares of Outbrain stock valued at around $169 million.
Leadership: David Kostman, Outbrain's CEO, will lead the combined company, while Teads co-CEOs Bertrand Quesada and Jeremy Arditi will serve as co-presidents.
Goal: Outbrain aims to become an "end-to-end, full-funnel platform for the open internet" by combining its strengths with Teads' video and CTV capabilities.

Reasons Behind the Acquisition
Diversification: Outbrain seeks to expand beyond its traditional click-based ad model into the more lucrative CTV space.
Premium Inventory: Teads' access to TV and video publishers will allow Outbrain to offer higher-quality ad placements and attract bigger budgets.
MFA Concerns: The industry's focus on combating made-for-advertising (MFA) traffic has pushed content recommendation platforms to diversify their revenue streams.
Financial Backing: Outbrain secured a $100 million revolving credit facility from Goldman Sachs, Jefferies, and Mizuho Bank to finance the deal.

Potential Benefits

The combined company will reach over 2 billion consumers per month and offer a broader range of advertising solutions, from performance-based marketing to brand building. By expanding into the CTV space and partnering with premium publishers, Outbrain aims to improve its profitability and reduce its reliance on the click-based ad model.

Overall, the acquisition of Teads is a strategic move for Outbrain as it seeks to strengthen its position in the evolving digital advertising landscape.