- PE firm Novacap has acquired TV adtech company Cadent.
- The deal is valued at around $600 million, according to a source.
- Cadent now plans an acquisition spree to bolster the platform’s growth.
Canadian private equity firm Novacap has acquired the US TV adtech platform Cadent, the pair said Wednesday.
Terms of the transaction were not disclosed by either firm. A person familiar with the matter said the deal value was close to $600 million. Cadent CEO Nick Troiano estimated the acquisition would be in the “top two or three” adtech transactions this year in terms of size.
Founded in 2007 and originally known as Cross Mediaworks, Cadent works across both traditional and connected TV. Its platform figures out the optimal ways for an advertiser to reach their desired audience at a suitable price and performance level across different devices and services.
As well as working with advertisers and all the major ad holding companies, its clients also include media owners who use Cadent to manage and optimize their advertising inventory and create audience segments through its partnerships with data marketplaces.
With traditional TV viewing long in decline, advertisers have increasingly turned to connected-TV platforms. But getting to the kind of scale a broadcast or cable TV buy used to offer can be complicated with viewing fragmented across different devices and channels — and ad buys are often negotiated with each platform individually.
“Cadent is unique in the marketplace in terms of our ability to support both broad-based traditional TV models as well as next-generation, emerging and high-growth CTV models,” Troiano said.
Advertisers are estimated to grow their spending on connected-TV in the US by 21.2% this year to reach $25.09 billion, according to Insider Intelligence. US broadcast and cable TV ad spending is expected to drop by 8% this year, but will still be significant at $61.3 billion, per Insider Intelligence’s forecast.
Troiano declined to provide financials but said Cadent could be described as a “rule of 50” company — one that has annual revenue growth as well as EBITDA equal to or more than 50% of its total revenue. The company has a headcount of around 400, he said.
With Novacap’s backing, Cadent is now on the hunt for acquisitions, and has a target list including companies that can help it build a full TV advertising stack from ad buying and campaign activation, to privacy tech, and reporting tools.
Pascal Tremblay, Novacap CEO and managing partner of its TMT group, said the firm was attracted to Cadent because it fits the profile of high growth, transformational companies it wants to invest in. Novacap was impressed by the leadership team and how the company acts as a connector in the converged TV marketplace, he added.
The acquisition is the fourth investment from Novacap’s $1.8 billion TMT VI Fund.
Investment banks RBC Capital Markets, TD Securities, and Scotiabank were financial advisors and provided financing to Novacap for the Cadent transaction; Cadent’s financial advisors were Evercore and Stifel. Cadent had previously been owned by another private equity firm, Lee Equity Partners, which acquired the company in 2013.
The adtech M&A market has been quiet so far this year as high interest rates and concerns about the macroeconomic environment and any associated advertising downturn has put off would-be buyers. Still, PE interest in the sector has remained strong, experts told Insider earlier this year. PE and PE-backed buyers represented 56% of acquisitions in the digital media, martech, digital agencies, and content and production industries in 2022, according to the advisory firm Ciesco.
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