US-based ad tech company Undertone has been acquired by Israel-based Perion for $180 million

Corey Ferengul UndertoneUndertoneUndertone CEO Corey Ferengul.

US-based ad tech startup Undertone has been acquired by publicly-listed Israeli marketing software company Perion in an all-cash deal worth $180 million.

In acquiring Undertone, Perion will have a bigger presence in the US — the biggest digital advertising market in the world.

Undertone specialises in serving what it calls “high-impact ads.” It differentiated itself by focusing on the creative, media, and tech needed to allow big-spending advertisers to pay for video and other forms of interactive digital ads that work across all different sizes of screens.

Undertone was founded in Ney York City 2001 and has around 275 employees across eight offices. It generated $89 million in net revenue in the first nine months of $104 million and reported adjusted EBITDA of $14.6 million. Ahead of the acquisition, the company had raised $40 million in funding, and as part of the deal Perion will take on Undertone’s $50 million in long-term debt.

Combined, the two companies are estimated to generate $350 million in net revenue this year and will have 660 employees across seven countries.

In a press release, Perion CEO Josef Mandelbaum, said: “In Undertone we have found a premium brand company of scale and profitability, with a differentiated sustainable position in the market. Together we firmly establish ourselves as the leader in delivering high-quality advertising solutions for publishers and brands. In addition to providing strong cash flow and revenue diversification, Undertone will add significant depth and talent to our company. With this acquisition we intend to become synonymous with engaging and impactful advertising solutions for brands and publishers.”

In the short-term, Undertone will operate independently from Perion as the two companies work out how they can best integrate together. Undertone CEO Corey Ferengul will continue in his current role.

Perion does already have a small footprint in the US, mostly thanks to its $42 million acquisition of ad aggregation platform Grow Mobile in 2014.

Ad tech stocks q3LUMA PartnersAd tech stocks had a rocky Q3.

Tuesday’s acquisition marks the latest chapter in the ongoing consolidation of the ad tech market. Industry observers suggest there will be plenty more acquisitions and mergers in 2016 to match the kind of activity seen this year. Many ad tech startups are fearful of the public markets, given the recent poor performances of most of the publicly-listed ad tech companies.

Lots of companies have been snapped up in recent months, including Verizon’s $4.4 billion purchase of AOL, and months later AOL’s $238 million acquisition of Millennial Media. Elsewhere, News Corp acquired Unruly in a deal worth $176 million, and IronSource merged with Supersonic, to name but a few.

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