- Adtech veteran John Nardone is building an adtech rollup.
- Nardone is working with PE firm GTCR to identify target companies.
- They're interested in solutions for post-cookie ad targeting, AI-powered creative, and media measurement.
A little over two years after selling adtech company Flashtalking to Mediaocean for $500 million, John Nardone is on the hunt for his next big adtech exit, he confirmed to Business Insider.
Nardone, who was most recently president of Mediaocean and left the company in August, has been quietly meeting with potential acquisition targets in recent months, intending to combine multiple firms in a roll-up.
Private equity firm GTCR is poised to be the financial sponsor on such a deal. Nardone intends to become CEO of the roll-up company and expects to bring on his own management team. Nardone also plans to invest in the target companies personally.
Nardone told Business Insider the rollup could take one of three forms: A company that focuses on post-cookie ad targeting; one that is focused on the future of ad creative amid the rise of artificial intelligence; or a company that looks to fix some of the digital media industry's measurement and ad attribution issues.
Nardone said that talks have progressed with one potential target in that measurement space, though he declined to name the company. Those talks are still in the early stages, and a deal may not materialize.
Once the multiple pieces of the roll-up are assembled, Nardone hopes to run a company generating a minimum of $100 million in annual revenue combined.
Beyond acquisitions, Nardone has also been discussing non-control investments, board seats, advisory roles, and consulting arrangements, he said.
GTCR's "less interventionist" strategy
Nardone said GTCR's strategy appeals versus some other PE firms because it is "extremely management-supportive and less interventionist."
GTCR and Nardone's relationship began several years ago when he had floated the idea of merging Flashtalking with fellow adtech firm Innovid and going public. The deal didn't happen — Innovid went public via a SPAC in 2021 — but the relationship with GTCR continued, and the PE firm ultimately made an offer to acquire Flashtalking. Days before the agreement closed, "Vista swooped in and stole the deal," Nardone said. Vista Equity Partners held a majority stake in Mediaocean at the time.
Stephen Master, a managing director at GTCR, said the PE firm and Nardone share the same focus areas — particularly the impact of platform changes and regulation on targeting and measurement and the advancement of AI. Plus, he said Nardone had a strong track record as an executive, including being brought in as an outside hire to fix or accelerate a founder-led business. Before Flashtalking, Nardone sold the adtech company [x+1] to fellow adtech firm Rocket Fuel for around $230 million, and he helped take the digital marketing and research company Modem Media public.
Master said GTCR's playbook for finding new investments is to find stable, "market-leading" companies that will benefit from the changes impacting the ad industry
Evolving the partnership
As GTCR and Nardone narrow their focus, Master said it could make sense to transition to a more formal partnership like it did with Dreamscape, now known as Guideline, where it partnered with former leaders of the ad verification company Integral Ad Science to create a new adtech business that is growing through acquisitions.
While the adtech M&A market has been muted over the past year, PE firms have been among the most active investors. According to the advisory firm Ciesco, private equity-backed deals accounted for 40% of deal volume in the tech and media sector in the first three quarters of 2023. Recent PE-adtech deals included Novacap acquiring TV ad tech company Cadent and Bridgepoint taking a majority stake in French adtech firm Equativ.