Ad-tech company AdTheorent nears $1 billion SPAC deal to go public

Advertising-technology company AdTheorent Inc. is nearing a combination with a special-purpose acquisition company to go public in a deal that would value the firm at about $1 billion, people familiar with the matter said.

AdTheorent uses machine learning and data science to optimize advertising and marketing campaigns for its customers. It says it can efficiently target consumers without using sensitive personal data.

New York City-based AdTheorent would merge with the SPAC MCAP Acquisition Corp., the people said. The deal could be announced as soon as this week.

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AdTheorent would join many other companies in the sector in raising money and going public as consumers spend more time online and large brands give priority to digital advertising to reach them. Innovid Inc. last month said it was merging with a SPAC, while content-recommendation firm Taboola.com Ltd. recently completed its so-called blank-check merger.

As investors pour money into the space, many other companies such as Integral Ad Science Holding Corp., PubMatic Inc. and AppLovin Corp. have also done traditional initial public offerings.

AdTheorent would be expected to raise about $120 million in a private investment in public equity, or PIPE, associated with the deal, the people said. Data-mining software firm Palantir Technologies Inc. is expected to participate in the PIPE, they said. Palantir has invested in many companies through PIPEs recently and reached agreements to work with some of the businesses in which it invests.

The MCAP SPAC raised about $315 million in February and is backed by Monroe Capital LLC. Previous Monroe SPACs took financial-technology firm Repay Holdings Corp. and Indie Semiconductor Inc. public.

AdTheorent would use some of the funds to pay down debt, cover transaction costs and compensate existing investors who aren’t rolling over their entire stakes in the company, the people said. Current investors are still expected to own more than 50% of the firm after the deal. AdTheorent is majority owned by H.I.G. Growth Partners, the growth capital unit of Miami firm H.I.G. Capital.

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The company is led by Chief Executive Jim Lawson and expects to post about $150 million in revenue this year, they said.

SPAC mergers have become popular for companies tied to technology because they allow startups to make business projections. Those aren’t allowed in a traditional IPO. Also called a blank-check firm, a SPAC is a shell company that raises money and trades on a stock exchange with the sole intent of taking a private firm public. The private company then replaces it in the stock market.

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SPAC executives have faced share-price volatility for companies going public recently, as well as signals that regulators might increase their oversight of the space. Record levels of issuance from early this year have slowed in recent months, though deals have continued at a steady clip.