Outbrain snaps up competitor Teads for $1 billion

Outbrain, a performance marketing tech platform, has acquired competitor Teads in a deal worth about $1 billion (£781 million).

The financial terms of the deal comprise $725 million upfront cash and $25 million deferred cash, 35 million shares in Outbrain and $105 million of convertible preferred equity.

Outbrain said the acquisition would create one of the largest open internet ad platforms in the world, “differentiated by its ability to drive outcomes for awareness, consideration, and performance objectives”. The combined entity will offer advertisers “unified access to the most engaging and valuable consumer media experiences, from CTV to online shopping”, Outbrain said. It will serve 20,000 direct advertisers, span more than 50 markets and reach more than two billion consumers per month.

The two adtech platforms are expected to generate a combined gross profit of between $660 million to $680 million, and an adjusted Ebitda of $180 million to $190 million in 2024.

Outbrain chief executive David Kostman will be CEO of the combined company, while Teads co-chief executives Bertrand Quesada and Jeremy Arditi will become co-presidents.

Outbrain plans to fund the deal with existing cash and $750 million in debt financing from banks.

The boards of both companies have agreed the transaction, which is expected to be finalised in the first quarter of 2025 and is subject to regulatory approval.

Kostman said: “This is a transformative transaction to establish a true end-to-end, full-funnel platform for the open internet. The combination of our highly-complementary offerings accelerates our vision to become the preferred partner to deliver meaningful brand outcomes across premium, quality media environments—while scaling the industry-leading offerings Teads is known for. I’m incredibly proud of what our team at Outbrain has created, and strongly believe that with Teads we will build tremendous value for our customers, employees, and partners. I believe this combination and the transaction’s financial structure position Outbrain to deliver significant shareholder value in the years to come.”

Quesada added: “This strategic combination presents vast new opportunities for the advertising industry at large. We’ve built a world-class team at Teads that has focused on driving the best video and branding outcomes, and in the last several years have successfully brought those strengths to CTV."

In 2020, Outbrain looked set to merge with Taboola, but the deal failed after both parties failed to reach an agreement, a year after announcing the merger.

Teads was founded in 2006.