The number of ad tech mergers and acquisitions is developing from a trickle to a steady flow

Samba TV’s most recent purchase capped off a flurry of activity during October, during which Zeta announced its purchase of LiveIntent, and Connatix confirmed its earlier reported merge with JW Player.

Meanwhile, speculation continues to mount that Integral Ad Science is exploring its options. Sources indicate that private equity would be the most likely candidate to take the publicly traded ad tech company into private ownership. Of course, any such a deal would likely prove a billion-dollar-plus transaction, echoing Outbrain’s purchase of Teads in August.

In Q3 2024, ad tech M&A activity saw significant growth, with overall volume up by 13% quarter over quarter and notable increases in scaled transactions over $100 million, according to investment bank LUMA Partners, which also identified PubMatic’s purchase of Mars United Commerce as a significant deal during the period.

Ad tech M&A deals greater than $100 million rose 26% quarter over quarter, driven by strategic acquisitions. This momentum reflects a broader trend of so-called “rationalization” deals aimed at consolidating or expanding into new markets.

Additionally, shifts in the digital ecosystem, including changes to cookie policies and ongoing antitrust trials, are anticipated to further impact dealmaking in this space, according to LUMA Partners’ CEO Terence​ Kawaja.

“So, we’re not in a gangbuster bull market for deals, but it is a revival relative to 2023, however,” he added. “Most of these deals that have been announced are in the latter [rationalization and consolidation] category; they’re good, but not great… nothing to write home about.”

Meanwhile, Michael Seidler, CEO of M&A advisory firm Madison Alley, noted how an uptick in the financial performance of certain sectors of the ad tech and media landscape has helped buoy interest from potential acquirers.

“Many companies didn’t perform well last year and took a little while to get back on track this year,” he told Digiday. “Now that you see companies getting close to 12 months of good performance behind them, things are starting to happen.”

Richard McDermott, managing director at Rosenblatt Securities — the company that hosted and programmed the Investors Summit during Advertising Week in New York — noted how recent interest rate reductions and the overall uptick in the stock prices of ad tech companies (particularly those that listed in 2021) have accommodated deal flow in recent months. And that such developments will likely spur similar activity in the new year.

“There’s just so many interesting developments,” he added, pointing to the emergence of CTV, data clean rooms and retail media. “You could see a bunch of transactions, but they haven’t occurred yet; it’s probably going to take one to get the ball rolling.”

While there may be “pent-up supply,” McDermott pointed out that this calendar year has seen a comparatively healthy deal flow in the sector compared to the relatively stagnant market state of 2022/23.

“The ship has left the shore; the question is, how far will it go,” he said. “I think there’s a lot of companies out there that some [potential acquirers] will look at, and there are some real consolidation opportunities.”

In a further echo of 2021’s industry, sources have anecdotally told Digiday that certain parties in the sector are beginning to make noises about joining the current raft of publicly traded ad tech companies — even dangling the prospect of earnings from an initial public offering during the recruitment process.

One source, who requested anonymity given their employer’s PR policies, said, “We’re not likely to see the same number of stock flotations we saw in 2021, but there is a small number [likely two or three] that could feasibly do it.”