Confirmed: Opera Buys Mobile Video Ad Platform AdColony For Up To $350M

This just in: Opera has confirmed that it has acquired AdColony — a deal that we had reported was in progress a couple of weeks ago but AdColony had denied (albeit in a very carefully worded fashion) was happening. The deal was made for $75 million in cash, plus potential earnouts of $275 million that bring the deal up to $350 million, according to a statement released to the Norwegian stock market, where Opera is listed.

The final price is actually even higher than the figure that we’d heard (of up to about $275 million). The deal is expected to close in the third quarter of this year.

AdColony had raised an undisclosed amount of funding. Insight Venture Partners was among its backers.

“Opera is growing rapidly and we are constantly looking for opportunities to bring best-of-breed services to the market,” said Lars Boilesen, CEO, Opera Software, in a statement. “AdColony is a natural fit for Opera and our mobile advertising subsidiary, Opera Mediaworks. This acquisition will augment our services with a robust specialization around mobile video – the fastest growing segment within the mobile advertising industry.

The deal will bring together one of the bigger startups in mobile video ads (that’s AdColony) with Opera, a company that has built a business in web browsers for mobile handsetsPCs, and TVs. Opera is an alternative to the likes of Google’s Chrome and Apple’s Safari, as it’s a portal to search for apps.

On mobile devices, one of Opera’s main selling points is its compression algorithms that the company promises give faster download speeds that use up less data, and therefore cost less to use.

Alongside that, it’s been building out a business in advertising to monetize that software. The latter business, which operates under the Opera Mediaworks brand, also includes AdMarvel, which Opera acquired in 2010, and other, more recent additions like German startup apprupt. In all, prior to AdColony, Opera has made eight acquisitions in the past four years, with several of those to further its advertising business.

The fact that AdColony has made a big point of creating technology that allows for fast-loading of video ads will play into Opera’s existing strengths, and it should allow the company to embrace more advanced advertising formats that command higher payments from brands.

Opera says that AdColony will continue to support existing customers as usual following the close of the deal, and that Will Kassoy, AdColony’s CEO, will also remain in his position, as well as take on the additional role of chief marketing officer for Opera Mediaworks.

Official note below.

Opera acquires AdColony to become the world’s leading mobile video ad platform

San Mateo, Calif. – Jun 24, 2014

Opera today announced that it has acquired AdColony, a leading mobile video advertising platform, to deliver best-in-class mobile video advertising to publishers and advertisers with a combined reach of more than 700 million global consumers.

“Opera is growing rapidly and we are constantly looking for opportunities to bring best-of-breed services to the market. AdColony is a natural fit for Opera and our mobile advertising subsidiary, Opera Mediaworks. This acquisition will augment our services with a robust specialization around mobile video – the fastest growing segment within the mobile advertising industry,” said Lars Boilesen, CEO, Opera Software.

AdColony excels in delivering innovative, TV- like crystal-clear video ads instantly in HD across the most popular iOS and Android smartphone and tablet apps in the world. AdColony’s proprietary Instant-Play™ video ad technology eliminates latency and long load times for video playback, providing the highest quality video experience for advertisers, publishers and consumers, with interactive elements to drive engagement, action and results. The company’s customers include Fortune 500 brands, performance advertisers and more than 70 percent of the world’s top grossing app publishers.

“AdColony’s team, technology and execution will elevate Opera Mediaworks’ already strong position in the mobile advertising industry. The combination will deliver an even better results-oriented, end-to-end offering for brands, agencies and publishers globally,” said Mahi de Silva, CEO, Opera Mediaworks.

AdColony will continue to support its existing customers as usual following the acquisition. Will Kassoy will continue to lead AdColony as CEO, and he will additionally take on the role of chief marketing officer of Opera Mediaworks.

“Opera Mediaworks shares our vision to enhance the mobile ecosystem and deliver the highest quality mobile video experience in the world,” said Will Kassoy, CEO, AdColony. “Our keen focus on the consumer experience in mobile apps combined with the massive growth of mobile video consumption worldwide, has catapulted our growth and made us a go-to partner for app developers and advertisers. We are excited to now be part of Opera Mediaworks’ renowned global organization and look forward to unlocking tremendous synergies together.”

For advertisers, the addition of AdColony will make Opera Mediaworks the most comprehensive suite of brand and performance-based mobile ad solutions, delivering creative, targeting, analytics, measurement, programmatic buying, and video and rich-media offerings.

For publishers, the combination will offer the world’s largest mobile-focused ad server along with a larger scope of managed, self-service and programmatic tools creating powerful ways to monetize their inventory effectively.

Mobile video advertising is the fastest-growing advertising segment in all of digital advertising. Mobile advertising spend is expected to grow to $41.9 billion by 2017, with mobile video advertising showing the highest growth rate, according to Gartner. More data in this infographic.

The acquisition is expected to close in the third quarter of 2014. Financial details of this transaction can be found in the Oslo Stock Exchange press release here.