Brightcove Spends $49M for Ad-Tech Company Unicorn Media
Boston-based online video company Brightcove is paying $49 million, mostly in stock, for a smaller private company that specializes in digital video advertising technology.
Brightcove says it will continue offering products from Tempe, AZ-based Unicorn Media once the deal is complete, and turn the Unicorn offices into a Brightcove branch operation. The purchase involves about 3 million shares of Brightcove stock (NASDAQ: BCOV) and $9 million in cash.
Brightcove also released preliminary financial numbers on Monday, saying it expects fourth-quarter revenue to reach up to $30 million, with earnings of up to $1.3 million. For the full year of 2014, Brightcove says it expects a loss of up to $12 million, with most of that attributable to Unicorn Media.
The stock market didn’t appear to love the deal, with Brightcove shares dropping significantly in early trading.
In a blog post, Brightcove CEO David Mendels said Unicorn’s products already are “delivering hundreds of millions of streams monthly for top media companies including ESPN, NBC News Digital, The Weather Channel, and many others.”
The company noted in particular that Unicorn had several patents on its technology, and promises to help media companies get more money from online video by customizing and targeting video for a variety of digital screens and devices.
The Unicorn deal gives Brightcove “the best technology for reaching hard-to-monetize devices, like PCs with ad-blockers installed, legacy/emerging phone platforms, gaming consoles, set-top boxes, and other connected living room devices like Apple TV and Google Chromecast,” Mendels wrote.
Mendels also said that the acquisition was part of a larger move by Brightcove to focus more on TV customers, including the establishment of a new media group within the company.
Brightcove, which went public in 2012, appointed Mendels as CEO about a year ago after founder Jeremy Allaire stepped down. Allaire remains the company’s executive chairman.
Unicorn Media’s investors included Europlay Capital and Blue Pear Ventures. According to its SEC filings, it looks like the company had raised more than $10 million in venture backing before raising about $9 million in debt financing less than a month ago——I’m guessing that has something to do with the $9 million in cash that Brightcove is shelling out for various bonus, option, and “transaction-related expenses.”