In yet another example of a consolidating advertising technology sector, Cross MediaWorks has agreed to acquire BlackArrow, a dynamic ad insertion specialist that counts a reach of more than 40 million homes.
BlackArrow, which has been rumored to be on the block for several months, counts several major pay TV operators as customers, including Time Warner Cable, Comcast, Charter Communications, Bright House Networks, Rogers Communications, Liberty Global/Virgin Media. BlackArrow is also a partner of Canoe Ventures, the MSO-backed advanced ad J.V. backed by Comcast, TWC, Cox Communications, and Bright House Networks.
Financial terms of the deal were not announced, but Cross MediaWorks said it will use BlackArrow to power the expansion of Cadent, its national TV advertising network. Founded in 2005, BlackArrow has raised about $65MM.
Update: The cash and stock deal is valued between $90 million to $120 million, The Wall Street Journal reported, citing an unnamed source familiar with the matter.
They said the deal will help BlackArrow to service new customers and expand its solutions to new TV platforms by tapping into Cross MediaWorks’ pay TV partnerships and linear TV advertising technology. As a subsidiary of Cross MediaWorks, BlackArrow will continue to operate separately alongside other Cross MediaWorks units, but will collaborate with all of the Cross MediaWorks’ portfolio companies.
The deal also follows a flurry of M&A activity in the ad-tech arena, including Comcast’s recent acquisitions of This Technology, Visible World and FreeWheel.
Founded in 2007, Cross MediaWorks has relationships with agencies such as IPG, WPP, Omnicom, Havas and Publicis, and works with top brands that include Allstate, Dannon, Dr. Scholl’s, FedEx, Jimmy Dean, Kumon, L’Oreal, Liberty Mutual, Macaroni Grill, Merck, Red Robin, Sears, StubHub and Welch’s.
Nick Troiano, CEO of BlackArrow, will serve as CEO of Cross MediaWorks, and Stephanie Mitchko-Beale, CTO of Cross MediaWorks will assume CTO/COO responsibilities. Mitchko-Beale, a former Cablevision Systems exec, joined Cross MediaWorks in July 2014.
Troiano will also join Barry Baker and Bob Wright, senior advisors to Lee Equity Partners, on the board of directors of Cross MediaWorks, which is part of Lee Equity Partners’s. Baker previously headed Boston Ventures' communications and entertainment practices, and was CEO of USA Interactive, parent company of USA Networks, Sinclair Communications and River City Broadcasting. Wright formerly was chairman and CEO of NBCUniversal and was a vice chairman and executive officer of GE.
“Cross MediaWorks and BlackArrow individually have deep roots in the pay-TV community,” said Joan Gillman, Executive Vice President and Chief Operating Officer, Media Services for Time Warner Cable and a member of the Board of Directors of BlackArrow, in a statement. “The integration of BlackArrow into the Cross MediaWorks family will provide operators with the tools and services they need to maximize revenue from their TV inventory, whether that's traditional linear TV spots or addressable advertising on VOD or OTT platforms”
“Both Cross MediaWorks and BlackArrow have a proven history of delivering in this space and their combination will serve to accelerate progress for our clients at MAGNA GLOBAL and across the industry,” added Todd Gordon, EVP, U.S. director for Magna Global.
“By combining BlackArrow’s multi-platform expertise and advanced advertising technology with Cadent Network’s best-in-class media sales force and deep pay-TV provider relationships, Cross MediaWorks will have the leading technology platform and sales organization across all forms of television viewing,” Troiano said.
