Ad Tech Briefing: PE firms are eyeing take-private deals but Google’s fate casts a shadow
This Ad Tech Briefing covers the latest in ad tech and platforms for Digiday+ members and is distributed over email every Tuesday at 10 a.m. ET. More from the series →
Last week, Digiday noted how 2025’s mergers and acquisitions were characterized more by a whimper than a bang, and the following day, that rang true with Integral Ad Science confirming its public market exit. The question is, just how many more deflated exits can we expect?
IAS will be acquired by Novacap in a $1.9 billion all-cash deal, ending months of speculation over the ad verification company’s future ownership, with the private equity firm set to pay a 22% premium for IAS.
The deal is expected to close before the end of 2025, with Vista Equity Partners, IAS’ largest shareholder, will also fully exit once the deal completes. IAS CEO Lisa Utzschneider emphasized the plan for continued investment in “AI-first” measurement products, as announced by the company.
Private equity cycles
As Digiday reported in June, multiple PE firms had been circling IAS, with Bain Capital and KKR both evaluating potential bids, though talks faltered amid political and economic uncertainty. Bankers also floated the idea of divesting IAS acquisitions, such as Publica, but those conversations stalled due to tariff concerns weighing on valuations.
At that point, IAS had just marked its fourth anniversary on the Nasdaq, trading at a $1.07 billion market cap — less than half of rival DoubleVerify’s $2.36 billion valuation, with several sources consulted by Digiday characterizing the Novacap takeover as a capitulation deal.
For months, Digiday sources had suggested Vista was under pressure to find an exit for IAS, as PE funds typically operate on a ten-year cycle with limited extensions, and Vista’s Fund VI, which backed the IAS acquisition in 2018, is approaching that horizon. Industry observers pointed to DoubleVerify’s relative stock-market success as another reason Vista might be eager to cash out.
Sector-wide political scrutiny
The buyout also comes amid heightened scrutiny of ad verification vendors. DoubleVerify is facing class-action litigation, while lawmakers in Washington have sharpened their focus on transparency and accountability in digital advertising.
Advertisers, too, are questioning the robustness of verification tools, particularly as new entrants like Scope3 and Mobian challenge incumbents with claims of greater sustainability or cost efficiency. Longstanding criticism that measurement firms deprive publishers of revenue further adds to the political and market pressure on the sector.
Despite this, IAS has signaled operational confidence, recently extending its credit line to 2030 and expanding its borrowing capacity from $300 million to $550 million. That flexibility, paired with Novacap’s resources, suggests management is preparing for aggressive investment into AI-driven verification and optimization products.
Consolidation needed
Terence Kawaja, CEO of investment bank LUMA Partners, noted that taking IAS private would give it more room to maneuver in executing any future-proofing efforts (necessary in the era of AI transformation) now that it won’t have to report earnings figures to Wall Street each quarter.
“It’s a smart move, Novacap’s a savvy investor that knows how to use M&A, so it wouldn’t surprise me to see it be [more] active, and that’s good because IAS needs to fundamentally augment their business on the pre-bid side of things,” he added.
Kawaja, the most well-known banker in the ad tech space, pointed to his investment bank’s Q2 market study, which highlighted that deal volume increased by 16% during the period.
However, potential buyers will continue to monitor macroeconomic developments, including possible changes in U.S. tariff policies and their associated global impacts, before writing any more big checks. “The market is over-fragmented, so we need fewer players doing higher volumes at lower take-rates with better quality,” he added, explaining his thesis on what will drive deal-making decisions.
More PE exits on the horizon
Stephen Adshead, founder and director of Spark Ninety, a consultancy steeped in the digital marketing sector, pointed to the assets of several other PE firms in the industry and assessed the likelihood of similar exits on the horizon. However, many believe it’s unlikely they will be at the frothy valuations of five years beforehand.
“It’s a question of timing, if you’re selling to private equity,” he told Digiday. “The set of questions a buyer will focus on, ‘what’s the market opportunity?’, and they’ll be looking three to five years out… and not disrupted by whatever is coming down the road, whether it’s AI or some other thing.”
However, he pointed out that some uncertainties can actually boost the market, with the potential for divestiture in the ongoing Google ad tech trial likely to pique the interest of some PE firms. “Sometimes there’s a risk big enough that it will put people off altogether, or there’s just not enough clarity. So the seller will wait a bit until there’s more clarity,” observed Adshead.
More take-private deals?
According to LUMA Partners’ Q2 report, the valuation of the 23 publicly listed ad tech companies on the public markets rose 22% on average, outperforming the Nasdaq (18%), with 13 of them gaining 20% or more. Notably, Magnite was up 111% annually.
However, many are significantly down from their initial public offering price – IAS was one such example – a dynamic prompting some to wonder if other PE firms will look to make a similar play. Many of IAS’ peers that went public in the 2022-22 window are likewise down from their 2021/22 valuations, although, speculation continues to whirl regarding more established players in this ad tech cohort, with Criteo as a notable inclusion.
Kevin Flood, a general partner at First Party Capital, an investment fund with an extensive interest in ad tech, noted how several PE funds such as Bain Capital and KKR had been interested in IAS, evidently believing them to be undervalued as a public asset.
However, some have pointed to the succession of high-profile ad tech closures over the past year – such as Oracle Advertising shutting down and Microsoft closing Xandr’s demand-side platform – which raises the question of whether investors are now looking for AI-first offerings, rather than purchasing assets in need of overhaul.
“I also think there’s a waiting game to see what’s going to happen to Google… for some people, it looks like they’re going to get off the hook again,” added Flood. “I think there’s more chances of consolidation than take-privates, even with the companies that are suffering from a stock price point of view, such as Teads, you’d expect them to recover once the EBITDA numbers follow through.”
Numbers to know
U.S. programmatic trends for August 2025, according to Databeat.
- +3 % — month-over-month, display ad CPMs rose
- +18 % — video ad CPMs jumped, compared to the prior month
- –29 % — year-over-year, display CPMs fell
- –27 % — overall CPM declined when combining display and video
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