Mediaocean will purchase Flashtalking, a digital ad serving company that is known for powering dynamic creative optimization for brands, for $500 million,  The Wall Street Journal first reported the deal this morning. Citing sources, the Journal says the deal could be a precursor to an IPO next year for Mediaocean.

Last month, we spoke with Mediaocean CEO Bill Wise on his company’s acquisition growth and the opportunities that the company’s owner Vista Partners, has brought.  We have republished that interview with today’s news.

Here is our original report on my conversation with Bill Wise for our series on innovation and value creation.

Entrepreneurs benefit when they work with investors at every stage of growth from startup to expansion and diversification. As co-founder and chief executive of advertising software company Mediaocean, Bill Wise has been through steps that have included being acquired by a private equity firm and buying other companies worldwide.

“It’s not a sprint. It’s also not a marathon. It’s a relay race,” he said in this interview with Beet.TV. “You need to know when to hand the baton off, and that’s through every facet of the company.”

Despite the negative effects of the pandemic on the global economy, businesses have many ways to find venture capital. Those sources can include technology entrepreneurs who want to diversify their wealth by investing in promising startups.

“People always say the best time to start companies is in a recession or a downturn,” Wise said. “So, it’s going to be really interesting in the next 12 months how many new startups we see coming out of this.”

Mediaocean has weighed different sources of financing throughout its growth, including the sale to private-equity firm Vista Equity Partners in 2015. At that time, the private-equity market was stronger than the public markets, and Mediaocean had more room to growth before considering an initial public offering (IPO) of stock.

“For us, we needed that next phase of maturation before exploring the IPO markets,” he said. “Who you partner with really matters.”

Acquisition Philosophy

Mediaocean, whose roots go back to the 1960s with Donovan Systems, has been aggressive about buying software companies that Wise once described as “mini Mediaoceans” in other markets. The acquisitions include MBS and Symsys to expand into Europe, and PIN Systems and BCC AdSystems to push into the Asia-Pacific region.

When investing in startups, Wise said he looks for entrepreneurs who are passionate about their businesses and who are willing to change strategies as the market demands.

“I look for that fire in the eye,” he said. “I look for something that’s passion-based.”

A combination of stimulus funding and low interest rates is pushing equity markets to new highs and making stocks expensive compared with their profits. A handful of tech stocks are driving the overall market.

“There’s a sense of irrationality around technology,” Wise said. “Luckily for us in this space, advertising has become a technology-driven business and a software-drive business.”

The rich valuations of adtech companies is giving them more currency for acquisitions. Wise sees a need for a diverse advertising market outside of walled gardens in search, social media and e-commerce.

“We believe the industry needs a neutral and independent operating system,” he said. “There’s too much buy-side technology being driven by Big Tech. Google, Facebook and Amazon are the world’s largest sellers of media. They control too much of the buy-side ad-tech.”

Mediaocean last year acquired 4C Insights to expand into audience analytics and planning, and Wise said he is shopping for other deal targets.

“We think we can continue to consolidate to have a much more holistic offering across every single media type, every single market around the globe,” he said.

You are watching “Innovation, Leadership, and Value Creation: Strategies Explored,” a Beet.TV leadership series presented by Progress Partners. For more videos, please visit this page.