AOL Acquires Web Video Company Adap.TV for $405 Million

By Peter Kafka for All Things D

Tim Armstrong hasn’t bought anything for a couple years. Now he has made his biggest purchase since taking over AOL in 2009: AOL is buying Web video company Adap.TV for $405 million in cash and stock.

That eclipses the $315 million AOL paid for the Huffington Post in 2011, and it’s a very different kind of purchase: Instead of producing content, Adap.TV uses software to match video ad buyers and sellers.

Video has been a big focus for AOL in the last few years, spurred by its acquisition of video syndicator 5Min in 2010. Last year, Armstrong said the company was on pace to do $100 million in video revenue.

This deal also syncs up with Armstrong’s push to emphasize “programmatic” ad sales, where buyers use technology to buy up big chunks of inventory; Armstrong is trying to position AOL as an alternative to Google’s own “stack” of ad technology that revolves around its DoubleClick platform.

Adap.TV reportedly raised $49 million over the last seven years; investors include Bessemer Venture Partners, Gemini Israel Funds, Redpoint Ventures and Spark Capital.

Here’s how AOL describes the Adap.TV deal, which it announced along with its Q2 earnings:

“On August 5, 2013, AOL entered an agreement to acquire Adap.tv for shares of AOL common stock with an aggregate value of approximately $83 million and estimated cash consideration of approximately $322 million, subject to adjustment for working capital and reduction for indebtedness and transaction expenses of Adap.tv that remain unpaid as of closing.

Adap.tv is a leading and global unified programmatic video platform powering video advertising for brand advertisers, agencies, publishers and ad networks. Adap.tv’s platform allows buyers and sellers to make decisions together on a unified technology platform, leveraging comprehensive data intelligence, across all screens. The combination of AOL and Adap.tv is expected to create the only global company with a full end-to-end solution and video stack for publishers and advertisers.”

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