DG Buys AdTech Player Peer39 For $15.5M After Peer39 Raised Nearly $30M In Its Lifetime

We are seeing a lot of activity in the world of advertising technology — from funding rounds to new product launches — but it’s not all good news, and inevitably consolidation is coming, too: Peer39, an adtech provider based in New York and Israel, is getting bought by offline and online ad management and ad distribution company DG. The price: $15.5 million — roughly about half of what Peer39 had raised from investors over the course of six years.

The cash-and-stock deal will see DG pay $10 million in cash, with the rest in shares, as well as a $2.3 million earn out payment, the companies noted in a statement.

The acquisition will see the CEO of Peer39, Andy Ellenthal, become EVP for DG’s global sales and operations.

Peer39 will become part of DG’s digital division, MediaMind, another Israeli company that DG bought in June 2011 for shares totaling $517 million. Its webpage-level data analysis, which works without the use of cookies, will be added to MediaMind’s real-time bidding offering.

Although there were customers for the product, the purchase underscores the fact that there may not be as much business in this space at the moment to justify the investment being made in it — or, to paraphrase AdAge, businesses that are actually just products or features. Or it could be that the market has still not become mature enough to have room for this new wave of advertising technology.

Investors including Canaan Partners, Dawntreader Ventures, Highbridge Capital, Evergreen Venture Partners, JP Morgan’s SVB Financial Group and Dan Ciporen and John Medved had put at least $27.4 million into Peer39 (the Israeli newspaper Globes puts total investment at $30 million).

DG also noted that it expects its Q1 revenues, which will be reported on May 9, to be $92.7 million, with a good performance in its traditional TV business helping it slightly exceed expectations.