Ad-Tech Company AdTheorent Reaches $ 1 Billion PSPC Deal to Go Public

Ad technology company AdTheorent Inc. is teaming up with a specialist acquisition company to go public in a deal that values ​​the company at around $ 1 billion, the companies said.

AdTheorent uses machine learning and data science to optimize advertising and marketing campaigns for its clients. He says it can effectively target consumers without using sensitive personal data.

New York-based AdTheorent merges with SPAC MCAP Acquisition Corp. The Wall Street Journal previously reported that the two sides were close to reaching a deal.

AdTheorent would join many other companies in the industry in raising funds and going public as consumers spend more time online and big brands prioritize digital advertising to reach them. Innovid Inc. announced its merger with a PSPC last month, while content recommendation firm Taboola.com Ltd.

recently completed its so-called blank check merger.

As investors invest money in the space, many other companies such as Integral Ad Science Holding Corp., PubMatic Inc.

and AppLovin Corp.

have also done traditional IPOs.

“The demand for digital content is growing at an insane rate,” said Jim Lawson, CEO of AdTheorent. “We are taking advantage of it.

AdTheorent is expected to raise around $ 120 million in a private public equity investment, or PIPE, associated with the deal. Data mining software firm Palantir Technologies Inc.

is one of the investors in PIPE. Palantir has recently invested in many companies through PIPE and has made deals to work with some of the companies in which it invests.

MCAP SPAC raised around $ 315 million in February and is backed by Monroe Capital LLC. Previous Monroe’s SPACs Took Fintech Firm Repay Holdings Corp.

and independent semiconductor Inc.

Public.

Private companies are flocking to Special Purpose Acquisition Companies, or SPACs, to bypass the traditional IPO process and get a public listing. WSJ explains why some critics say investing in these so-called blank check companies is not worth the risk. Illustration: Zoé Soriano / WSJ

AdTheorent plans to use part of the funds to repay debt, cover transaction costs and compensate existing investors who do not renew their entire stake in the company. Current investors are still expected to own more than 50% of the company after the deal. AdTheorent is majority owned by HIG Growth Partners, the growth capital unit of Miami-based HIG Capital.

The company expects to generate around $ 150 million in revenue this year and use some of the deal’s remaining cash to expand beyond its core markets in the United States and Canada, Mr Lawson said.

PSPC mergers have become popular for tech-related companies because they allow startups to make business projections. These are not allowed in a traditional IPO. Also known as a blank check company, a PSPC is a shell company that raises funds and trades on the stock exchange for the sole purpose of listing a private company on the stock exchange. The private company then replaces it on the stock market.

PSPC executives have faced volatility in stock prices for companies that recently went public, along with signals that regulators may be stepping up their oversight of the space. Record emission levels since the start of this year have slowed in recent months, although transactions have continued at a steady pace.

Write to Amrith Ramkumar at [email protected]

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Appeared in the print edition dated July 27, 2021 under the title “AdTheorent Nears SPAC Listing Deal”.


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