By Ronan Shields • December 6, 2024 •
Ivy Liu
The much-touted revival of ad tech mergers and acquisitions appears underway. Earlier this week, Experian confirmed it is buying curation firm Audigent, capping off a round of such consolidation moves in Q4.
As the week closed, sources told Digiday that Channel Factory, is seeking to join these ranks, with the company understood to be holding talks with potential new backers in recent weeks.
Sources consulted by Digiday estimate the company, which specializes in the brand suitability sector, could command an exit price in the hundreds of millions of dollars range. Albeit it’s understood Channel Factory is characterizing its latest efforts as a bid to gain further investment, as it seeks to accelerate its growth.
Three separate sources have told Digiday that Channel Factory has appointed M&A and financial advisor Canaccord Genuity to solicit further investment; both private equity and strategic players are understood to have expressed interest.
Digiday approached sources who gave varying opinions on Channel Factory’s current financials.
One claimed to have seen such numbers earlier in the year and asserted that Channel Factory’s EBITDA was in the region of $20 million to $25 million. A separate corporate development source, who also claimed to have seen Channel Factory’s financials and similarly requested anonymity given the nature of their role, noted that the company’s EBITDA is “growing pretty well.”
If accurate, such figures would likely attract interest from several transatlantic private equity funds, which, given current market conditions, would value the outfit at “12-to-14 times that number,” said the source, who requested anonymity.
Discussion over its current valuation is understood to be in the range of $300 million to-$400 million.
Speaking separately, a further background source claimed Channel Factory has been seeking suitors for some time and is “getting closer to a deal.” One source consulted by Digiday claimed a Middle East-based media group and another strategic ad tech player had expressed an interest in exploring a deal with Channel Factory, but declined to name either party.
Representatives of Channel Factory declined Digiday’s request for comment. Similarly, Canaccord Genuity – an outfit involved in the $324 million sale of AdTheorent to Cadent and has a relationship with serial ad tech acquirer Zeta Global – did not respond to a request for comment by press time.
Founded in 2010, Channel Factory specializes in optimizing advertisers’ video ad performance on social media platforms, particularly YouTube, using its IQ Series of tools, with the California-headquartered company also possessing an extended footprint across Europe and APAC.
Speaking separately, Terence Kawaja, CEO of investment bank LUMA Partners, commented on how companies involved in providing brand safety in the platform space, i.e., on Wall Garden sites such as Instagram or YouTube, are beholden to Big Tech players, a likely area of concern for any potential suitor.
“The challenge is platform-reliance; a single policy change from one of them, and you can go out of business overnight,” he observed.
Earlier this week, Experian confirmed its purchase of Audigent, the latest of several such deals in the space in successive months after Samba TV confirmed its purchase of Semasio in October. This came a month after Zeta announced its purchase of LiveIntent and Connatix confirmed its earlier reported merger with JW Player.
https://digiday.com/?p=562505
