Ad tech player Rocket Fuel in rival takeover bid

Pippa Chambers
By Pippa Chambers | 31 August 2015

Ad tech company Rocket Fuel, headed up in Australia by JJ Eastwood, is back in the limelight regarding a takeover deal from marketing cloud company and rival, Gravity4, AdNews understands.

Gravity4, a private San Francisco-founded business, run locally by ex-MediaCom chief digital officer, now Gravity4 MD Joshua Rex, is thought to have made an offer of about US$260 million – which is nearly $100 million less than a previous takeover bid, back in May this year.

NASDAQ-listed Rocket Fuel, which recently reported a loss of $23.7 million in Q2, saw its stock hit a 52-week low on Monday at $5.15.

It is thought Gravity4 wants to fix up some of Rocket Fuel's so-called ailing elements and wants to do so with access to its marketing cloud and “integrated stack”. While it has a seat with the Facebook Exchange (FBX) and integration with Facebook’s DPA product, AdNews understands Rocket Fuel lost its seat on FBX.

It is thought that Gravity4’s founder and CEO Gurbaksh Chahal, who is also the founder of RadiumOne which he allegedly previously tried to buy back, has written a letter to Rocket Fuel's chairman George John and its interim CEO and director Monte Zweben.

The offer is a marked drop from its first offer of US$350 million back in May, to which Zweben said did not constitute a credible offer, begging the question as to why would they accept it?

Both companies were unable to comment on the new takeover offer.

In July, IPG Mediabrands-owned trading desk Cadreon signed a global deal with programmatic buying platform Rocket Fuel to boost its cross-channel results.

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