AT&T, DISH Network & WPP To Acquire INVIDI Technologies

U.S. telecom and pay-TV behemoth AT&T Inc. (NYSE:T) , DISH Network L.L.C., a wholly-owned subsidiary of satellite TV operator DISH Network Corp. (NASDAQ:DISH) , and British multinational advertising and public relations company WPP (LON:WPP) Group plc jointly announced plans to acquire advertising companyINVIDI Technologies.

AT&T, DISH and WPP have decided to maintain INVIDI’s current operations along with its current employees in their current locations. INVIDI has offices in Princeton, NJ, Newtown, PA, New York, Denver, CO and Edmonton, Alberta, Canada. Moreover, INVIDI will continue operating independently under the companies’ collective ownership. Also, each of its new owners will appoint representatives to INVIDI’s board of directors. Meanwhile, AT&T will be holding a controlling stake in the company.

The main purpose of this joint acquisition is to expand addressable advertising businesses of all the three owners along with INVIDI’s addressable capabilities and product offerings through industry-wide deployment of addressable advertising.

The transaction is subject to pre-merger review under the Hart-Scott-Rodino Act and other customary conditions. The financial terms of the deal – which is expected to close in the first quarter of 2017 – have been kept under wraps.

Buyout Prospects

INVIDI has a technology that allows advertisers to deliver addressable video advertising to a particular group of audience or customized lists — on TV and across multiple distribution platforms. This enables advertisers and media buyers to accurately control reach, separation and frequency across video platforms.

AT&T already holds a position in the advertising industry through AT&T AdWorks which specializes in addressable TV advertising and managing ad inventory across national ad-supported cable networks. The telco observed significant revenue growth in its advertising segment and expects to rake in more profits from its DirecTV Now portfolio by selling more valuable ad spots to individuals interested in an advertiser's product. Similarly, DISH Media Sales’ addressable advertising introduced in 2012 and has seen substantial interest from advertisers due to the power of addressability.

Hence, both AT&T and DISH Network are optimistic about the joint pact with INVIDI. They expect this deal to help grow their addressable advertising businesses with respect to innovation and expansion into new platforms. This joint transaction opens up the scope of innovation and thus expands the reach of addressable TV advertising, making the advertising industry available for brands and consumers. It also marks the way how the increasing importance of ad inventory is transforming the acquisition and distribution process of video advertising.

Recent Events

On Nov 22, Cable TV behemoth Comcast Corp. (NASDAQ:CMCSA) and DISH Network jointly announced that the latter’s Internet TV service – Sling TV – will be integrated into the cable multi-service operator’s (MSO) cloud-based, managed video delivery platform, X1.

On the same day, AT&T announced agreements with Twenty-First Century Fox, Inc. (NASDAQ:FOXA) and Byron Allen’s Entertainment Studios Networks to expand the number of channels on DirecTV Now. As per this deal, Fox packages and Entertainment Studios’ cable television networks – COMEDY.TV and JUSTICECENTRAL.TV – will be made available on AT&T’s DirecTV Now.

Both AT&T and DISH currently have a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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