A group of Chinese investors has acquired contextual advertising company Media.net, founded by serial entrepreneur Divyank Turakhia in 2010, for $900 million in cash.
Dubai- and New York-based Media.net provides products for both publishers and advertisers. It provides contextual ads offered by Yahoo Inc and Microsoft Corp's Bing search engine.
The Chinese consortium is led by Zhang Zhiyong, the chairman of Beijing Miteno Communication Technology Co, Media.net said in a statement.
Media.net will eventually become a subsidiary of Miteno after the Chinese firm acquires the ad-tech company from the consortium.
The acquisition looks more like a reverse merger, where a private company acquires a public company to bypass the long paperwork required for listing shares on stock exchanges. This is because Miteno's shares, listed on the Shenzen Stock Exchange, have been suspended for trading since December last year, according to a report by Bloomberg.
The report also said that Miteno only had $23 million in cash and equivalents and its deal to acquire Media.net may involve equity, additional fundraising or a combination of the two.
Media.net, which is touting the deal as the third-largest ad-tech acquisition till date, said that it has received $426 million from the consortium and will get the remaining later.
"The acquisition will enable Media.net to be an even greater platform for innovation and investment on a global scale," Turakhia said in the statement.
Media.net manages $450 million of annual advertising revenue via its platform, half of which is generated from mobile users. The US accounts for 90% of Media.net's revenue, which totalled $232 million in 2015, the company said. It has about 800 employees, up from 650 in 2015.
This is the second exit for Turakhia. In 2014, Endurance International Group, a provider of cloud-based SMB solutions, acquired Mumbai-based Directi Web Technology Pvt, Ltd that he had co-founded with brother Bhavin Turakhia and other group entities for $160 million. Directi was established in 1998 with Rs 25,000 ($600 then) lent by their father.
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