PE firm Novacap has acquired the TV adtech platform Cadent, which now plans to go on an acquisition spree

• PE firm Novacap has acquired TV adtech company Cadent.
• The deal is valued at around $600 million, according to a source.
• Cadent now plans an acquisition spree to bolster the platform’s growth.

Novacap, a Canadian private equity firm, announced the acquisition of Cadent, a US TV adtech platform, on Wednesday.

The transaction’s terms were not disclosed by either firm. According to a source familiar with the situation, the deal was worth around $600 million. Cadent CEO Nick Troiano predicted that the acquisition would be among the “top two or three” adtech deals this year in terms of size.

Cadent, originally known as Cross Mediaworks, was founded in 2007 and works in both traditional and connected TV. Its platform determines the best ways for advertisers to reach their target audience at the best price and performance level across various devices and services.

In addition to working with advertisers and all of the major ad holding companies, Cadent’s clients include media owners who use the company’s partnerships with data marketplaces to manage and optimize their advertising inventory and create audience segments.

Advertisers have increasingly turned to connected-TV platforms as traditional TV viewing has declined. However, achieving the kind of scale that a broadcast or cable TV buy used to provide can be difficult due to viewing fragmentation across different devices and channels — and ad buys are frequently negotiated with each platform separately.

“Cadent is unique in the marketplace in terms of our ability to support both broad-based traditional TV models as well as next-generation, emerging, and high-growth CTV models,” Troiano explained.

Advertisers in the United States are expected to increase their spending on connected TV by 21.2% this year, to $25.09 billion, according to Insider Intelligence. According to Insider Intelligence, US broadcast and cable TV ad spending will fall by 8% this year but remain significant at $61.3 billion.

Troiano declined to provide financial information, but said Cadent is a “rule of 50” company, with annual revenue growth and EBITDA equal to or greater than 50% of total revenue. According to him, the company has around 400 employees.

Cadent is now on the lookout for acquisitions, with a target list that includes companies that can help it build a full TV advertising stack, from ad buying and campaign activation to privacy technology and reporting tools.

Novacap CEO and managing partner of its TMT group, Pascal Tremblay, said the firm was drawn to Cadent because it fits the profile of high growth, transformational companies in which the firm wants to invest. The leadership team and the company’s role as a connector in the converged TV marketplace impressed Novacap, he added.

The acquisition is Novacap’s fourth investment from its $1.8 billion TMT VI Fund.

RBC Capital Markets, TD Securities, and Scotiabank served as financial advisors and provided financing to Novacap for the Cadent transaction; Evercore and Stifel served as financial advisors to Cadent. Cadent was previously owned by Lee Equity Partners, a private equity firm that purchased the company in 2013.

The adtech M&A market has been relatively quiet this year, owing to high interest rates and concerns about the macroeconomic environment, as well as any associated advertising downturn. Nonetheless, experts told Insider earlier this year that private equity interest in the sector has remained strong.According to the advisory firm Ciesco, private equity and private equity-backed buyers will account for 56% of acquisitions in the digital media, martech, digital agencies, and content and production industries in 2022.

PE firm Novacap has acquired the TV adtech platform Cadent, which now plans to go on an acquisition spree