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Brightcove Acquires Ooyala for $15 Million


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Online video platform provider Brightcove is acquiring longtime competitor Ooyala for $15 million in cash and stock, the company announced Wednesday afternoon. The transaction is expected to close in the first half of this year.

As part of the acquisition, Brightcove will get its hands on Ooyala 's software platform, technology and intellectual property. The company also intends to take on "substantial portions" of Ooyala's staff across engineering, support and sales, according to Wednesday's announcement.

The prime jewels of the acquisition may however been Ooyala's existing customer base, which includes Tribune Media, Turner, the PGA Tour, and brands including Sephora, Dell and Audi.

"Ooyala has tremendous global customers who understand the power of video and its ability to transform business and reach new customers," said Brightcove CEO Jeff Ray in a statement. "This transaction, which includes immediately growing our highly skilled and committed global workforce, accelerates our ability to deliver faster innovation and deeper support for all customers."

Australian telco giant Telstra bought a stake in Ooyala in 2012, and proceeded to buy the rest of the company in 2014, spending around $500 million combined. However, by last year, Telstra had written down its investment in the video company, and subsequently proceeded to sell it to Ooyala's management for an undisclosed amount.

Both Ooyala and Brightcove were once on the forefront of the online video business, powering the services of premium publishers while preparing for a transition to online-based TV viewing.

That transition happened, but it coincided with a massive commoditization of video hosting and delivery. What's more, some of the most successful streaming services decided to build their own infrastructure, leaving platform providers to compete for mid-level services with much less revenue potential.

Brightcove agreed to pay $9 million in stock (at Wednesday's closing price of $8.58) and $6.25 million in cash for Ooyala. Brightcove's financial advisor on the transaction was BMO Capital Markets.

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