Sizmek Is Acquiring Rocket Fuel for $145 Million to Create a Formidable Ad-Tech Force

Should help them compete against the Google-Facebook duopoly

Ad tech firms are working together to battle the space's biggest players.
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Sizmek, a technology company that helps advertisers manage data, purchase digital ads and test ad creative, will buy programmatic advertising player Rocket Fuel for $145 million.

The deal, announced today, should allow the private equity-backed Sizmek to harness Rocket Fuel’s artificial intelligence-powered platform while creating one of the largest independent marketing platforms. In theory, the deal will help Sizmek and Rocket Fuel combine their resources to compete with behemoths like Google and Facebook. According to the companies, they will now serve more than 20,000 advertisers and 3,600 agencies.

“The acquisition of Rocket Fuel brings omnichannel creativity and AI-enabled decisioning together under one roof, providing our clients with a self-service predictive marketing platform that optimizes campaigns across the entire media plan,” Mark Grether, executive chairman of Sizmek, said in a statement. “This is the next logical step in marketing automation–media optimization and full creative optimization combined, bringing together the context and the creative for the optimal consumer experience. The result is advertising that is deeply personalized, highly intuitive, and AI-enabled for peak performance, redefining the boundaries of creative possibility and media execution.

The acquisition is expected to close in the third quarter and was unanimously approved by publicly traded Rocket Fuel’s board of directors. The deal includes a 30-day ‘go shop’ period, which allows Rocket Fuel to solicit other bidders.

If the deal closes, Sizmek—which was acquired by Vector Capital last year for $122 million—plans to make the combined company private again less than four years after Rocket Fuel went public in 2013 for $29 per share share. (Rocket Fuel shares closed on Monday at $2.69 per share with a market cap of $124 million—far below the company’s peak of $66.43 per share in October 2013.)

According to Rocket Fuel CEO Randy Wootton, the deal will help the company more rapidly scale globally.

“By integrating with Sizmek, we’re effectively combining the powerful brand-building insights delivered via our Predictive Marketing Platform’s Decision Engine, with Sizmek’s creative optimization platform,” he said in a statement. “This union creates one integrated, full-funnel solution to enable agencies and their brands to address key performance objectives across paid, owned and earned media.”

Meanwhile, the battle against the duopoly isn’t new in ad tech. For instance, in May, Rocket Fuel joined a consortium of ad-tech companies, including AppNexus and LiveRamp, as the players set out to attract more brand budgets by creating new standards for programmatic advertising.