Adobe's Acquisition Of TubeMogul Validates DSP TV Model

Adobe Systems Incorporated (NASDAQ: ADBE) announced Thursday it has agreed to acquire TubeMogul Inc (NASDAQ: TUBE) in a deal which values the company at $14 per share.

TubeMogul provides a single platform that allows brands and agencies to plan and buy video advertising across desktop, mobile, streaming devices and TVs.

Albert Fried's Rich Tullo told Benzinga that Adobe's acquisition of TubeMogul "validates the DSP TV model" and provides TubeMogul with the necessary balance sheet scale and technology scale to compete in a "scaling industry."

A demand-side platform (DSP) enables advertisers to purchase display ad inventory via real-time bidding (RTB) exchanges.

Tullo also suggested that the the acquisition validates his view that MDC Partners Inc (NASDAQ: MDCA) "should be and can be" sold at a premium of at least 100 percent to Thursday's share price, especially after the company just removed a "huge overhang."

Adobe said the acquisition of TubeMogul will create the first end-to-end independent advertising and data management solution that spans across TV and digital formats. The acquisition also expands Adobe's digital marketing and advertising technology.

Adobe also noted it's currently unable to provide an estimated impact on its future GAAP earnings.

"Adobe and TubeMogul share a similar culture and vision for the future of advertising," said Brett Wilson, CEO and co-founder, TubeMogul. "The combination of Adobe Marketing Cloud with TubeMogul's software creates a uniquely comprehensive platform that will help marketers always know what's working -- and act on it. We're thrilled to call Adobe home and believe this will be a great move for our clients, team and shareholders."