The Wall Street Journal ran a story yesterday that said New York-based online ad-buying marketplace MediaMath is exploring strategic options amid an uptick in its market. MediaMath is one of the few independent DSPs (Demand-Side Platforms) left.
MediaMath was one of Safeguard Scientific’s largest portfolio holdings (and still is). Safeguard invested $15.6 million in MediaMath between 2009 and 2010 and accumulated a 22% stake. When the decision to begin gradually divesting its portfolio was made in 2018, Safeguard completed in July 2018 the sale of 39.1% of its 22% ownership position in MediaMath back to MediaMath for $45.0 million in cash. The repurchase represents the equivalent of an implied cash-on-cash return of 4.5x on Safeguard’s 39.1% ownership position. It reflected a total valuation for MediaMath of $523 million.
MediaMath had the right to repurchase an additional 10.9% of Safeguard’s ownership position on or before the 180 day anniversary of the initial repurchase for $12.5 million in cash. However, that date has long passed and Safeguard still owns a 13.3% stake as of the end of its first quarter 2021.
I couldn’t find a current valuation estimate for MediaMath, but my guess is its next valuation will be significantly higher than the $523 million at which Safeguard sold in 2018. But that’s only a supposition, and MediaMath faced significant risk during the pandemic so I don’t think you can criticize Safeguard much for taking the money when it did. And Safeguard may still receive a good gain when the remaining 13.3% is sold.