Hollywood-headquartered interactive video advertising company Verb Technology Co. Inc. purchased Utah-based video sales company Sound Concepts Inc. for $25 million last week.
The deal comes two weeks after Verb’s initial public offering on Nasdaq. The company listed as VERB at an initial price of $3.13 per share and raised $20.5 million.
The Sound Concepts purchase was a cash and stock mix. Verb said it used $11 million from its IPO to help fund the deal.
Verb Technology’s digital advertising platform makes videos interactive, allowing a viewer to click on items in an ad video as it continues playing. Verb sells its technology to companies that develop marketing software, taking a cut of their sales to customers. It has worked with Marketo Inc., Salesforce.com Inc., Microsoft Corp. and others.
Advanced digital marketing and video advertising are areas ripe for growth in coming years, analysts say.
Craig MacDonald, managing director at consulting firm Accenture, said the video ad market is growing by more than 30% a year and could continue that pace for the next three to five years.
“There is a ton of money flowing into the video ad space now,” McDonald said. “Digital video is one of the fastest growing areas of the advertising landscape.”
Verb CEO Rory Cutaia said, “I wanted to be in that sector because I see enormous growth coming over the next few years.”
Cutaia described the Sound Concepts acquisition as a competitive move. “Acquiring Sound Concepts allows us to remove a competitor, combine our technology into a single platform and grow the business,” he said. The acquisition adds 90 people to the company’s 30-person workforce, and gives Verb an additional office in Utah.
And Cutaia said he’s still on the hunt. “We’re looking at additional acquisitions (of) businesses that are complementary to our own and will be lucrative to our shareholders,” he said.
Verb will also open an 8,000-square-foot office in Newport Beach, its third in addition to the newly acquired Utah outpost. Cutaia said the company’s headquarters will remain in Hollywood for the foreseeable future, but some employees will move to the new building in July.
Verb’s plans for an IPO were announced in February 2019 when it changed its name from Nfusz Inc. to Verb Technology in advance of the public listing.
CORRECTION: An earlier version of this story, misstated Verb Technology Co.’s original share price, new office location and opening date. The company’s initial public offering share price was $3.14 per share, and it will open its Newport Beach office in July.
