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Mediaocean Acquired By Private Equity Firm Vista

June 29, 2015

This article from AdExchanger covers our recent deal with Vista Equity Partners. 

by Kelly Liyakasa, AdExchanger

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Continuing the trend of private equity investment in ad tech, Vista Equity Partners revealed Monday it had acquired a majority stake in Mediaocean, a company most commonly known for automating trafficking and billing software for ad agencies.

The deal values Mediaocean at about $720 million, the company confirmed. Mediaocean was the result of the 2011 merger of Mediabank and Donovan Data Systems, a deal valued at $1.5 billion.

"Four years ago we created Mediaocean with the goal of providing the industry with an open platform to easily integrate campaigns across all traditional and digital media,” said Michael Donovan, chairman of Mediaocean, in a statement. “When Vista approached us, we were impressed by its strategic vision."

Donovan said Vista is more like an "enterprise software holding company than a classic private equity firm with nearly 200 employees – most of whom are operators, not finance professionals.”

The investment will go toward further development of products that address the convergence of digital video and TV, the company said.

Mediaocean's products are designed to expedite the agency workflow and planning process. In 2013, it opened its software to third-party ad servers by launching what it calls a Connect Partner program, a marketplace where agencies are charged on the percentage of spend they put through the platform.

Mediaocean is also investing in Spectra, a "broadcast exchange" of sorts for TV buyers, and recently extended that offering to include digital video via its partnership with Videology. Working with Videology doesn't hinder Mediaocean's interoperability with other major video buying systems, including TubeMogul and Adap.tv, according to the company.

In fact, buyers expect more convergence on the back end. "They don't want to just partner with one, they want to partner with several to see which is most effective for their needs," Jim Tricarico, CRO of broadcast and multichannel video programming distributor  partner Cadent Network, said in an interview recently.

He noted, for example, that MAGNA Global uses TubeMogul while WPP/Mindshare use Videology, which underscores the importance of supporting multiple video/TV planning instances. This is what Mediaocean is building toward.

 

Bill Wise, CEO of Mediaocean, spoke with AdExchanger about the deal's implications.

AdExchanger: How much has Mediaocean raised to date and why private equity?

BILL WISE: Mediabank had raised a total of $50 million over a course of their tenure before we merged with Donovan. We embarked on a process about six months ago where we evaluated all strategic options, an IPO, an exit to a strategic [partner] and at the end of the day, we're excited about our future and passionate about what we're doing. I don't think anyone wanted an exit where it was an end. Private equity lets us keep doing what we love for our customers.

And for you, personally?

A significant amount of my personal time [if Mediaocean had gone public] would be in managing Wall Street and public company investors. In a deal like this, I get to focus nearly all of my efforts on the business of my customers. The private markets are frothy, I'm not going to lie. So if you can get the financial outcome of an IPO without the burden of managing a public company, what's better than that?

Do you identify as an ad server, as some have described?

We live in a market where it's … varying shades of grey. [Facebook's] Atlas and [Google's] DoubleClick are very significant partners of ours, but there are some aspects of workflow, pricing and bill pay where there is some crossover. I like to say there's more crossover than [purely] competitive.

Vista was so excited about Mediaocean because we're really unique and no one else does what we do at the scale that we do it. We are a neutral software company. We're not a demand-side platform. We aren't an SSP. We don't have decisioning engines. We're not an ad exchange or marketplace, so we are really neutral and don't compete with anyone and Vista's heritage is in investing in mission-critical vertical software companies. Vista's like a holding company for software companies. They buy companies and run them, so what I feel like I got in Vista was a partner to help me run the business, which is exciting.

What's your product/expansion focus?

The first is absolutely helping with media convergence. We're very focused on converging TV and video to one marketplace design, similar to what we've done with digital radio with Pandora and Spotify. The second is geographical expansion. Digital is inherently global so it's much easier to expand geographically, and we're currently implementing in both France and Germany. We've had tremendous success in the UK. We're in the early stage of scoping out Asia-Pacific for 2016.

Third is diversifying our product, one being connection to the sell side of the market and then extending into planning. On the partnerships, the ones who really stuck out are the ones who represent supply, Pandora, Spotify, AdStruc, Videology, all the companies who aggregate supply and want to plug into our demand.