Habu Acquisition: Key Details, Impact, and What Comes Next

LiveRamp's acquisition of Habu marks a significant milestone in the data collaboration industry. By integrating Habu's advanced clean room technology, LiveRamp aims to create the only interoperable platform for data collaboration across all clouds and walled gardens. This strategic move enhances LiveRamp's capabilities, providing businesses with a robust foundation for future innovations and a competitive edge in the market.

What Is Habu?

Founded in 2018, Habu specializes in data clean room technology, offering solutions that enable secure and privacy-compliant data collaboration. Its core products include advanced data clean rooms and analytics tools designed to facilitate seamless data sharing across various platforms. Habu's unique selling points include its interoperability across all clouds and walled gardens, and its emphasis on data privacy and security, making it a standout in the data collaboration market.

Who Acquired Habu?

LiveRamp is a leading data collaboration platform, enabling businesses to connect data across various platforms and unlock valuable insights. Its key products include solutions for consumer data strategy, enterprise identity, marketing impact, cross-media measurement, media networks, and clean rooms. Trusted by over 900 global customers, including many Fortune 500 companies, LiveRamp is recognized for its expertise in data ethics and consumer privacy, making it a significant player in the data-driven marketing and advertising industry.

When Was Habu Acquired?

LiveRamp announced its acquisition of Habu on January 17, 2024. This acquisition comes at a pivotal time in the industry, marked by increasing signal loss and stricter privacy requirements. Organizations are focusing on building first-party data and need effective ways to collaborate with partners while maintaining privacy. Data clean rooms have emerged as a key strategy for safe data collaboration, making this acquisition timely and relevant to current industry needs.

Why Was Habu Acquired?

• Market Expansion: The acquisition of Habu allows LiveRamp to expand its market by providing a unified platform for data collaboration across all clouds and walled gardens. This includes major players like Amazon, Google, and Facebook, as well as new partners across media networks and major MVPDs, CTV platforms, and TV programmers. Additionally, Habu’s network of walled garden and premium publishers spans 200+ markets globally, accelerating LiveRamp’s international expansion efforts.
• Technology Integration: The integration of Habu's data clean room technology with LiveRamp's existing capabilities creates an interoperable platform that simplifies data collaboration. This includes cross-cloud interoperability and making data actionable for both technical and marketing users. The platform connects data seamlessly across clouds, warehouses, and clean rooms, including Amazon Web Services, Google Cloud, Snowflake, Azure, and Databricks. Furthermore, the acquisition will advance AI initiatives through greater data access to train and optimize analytical models.
• Competitive Advantage: The combined capabilities of LiveRamp and Habu provide a competitive edge by offering a first-of-its-kind unified view for measuring campaigns across all programmatic channels and walled gardens. The platform's ability to simplify partnerships with all media platforms and access a wide selection of media, data, and technology partners empowers brands to navigate marketing in a post-signal world with confidence. Additionally, the platform's foundation for future innovation through enterprise AI initiatives further strengthens its competitive position.

Acquisition Terms

• Acquisition Price: Approximately $200 million.
• Payment Method: Approximately $170 million in cash at closing, with the remaining consideration in LiveRamp stock related to unvested stock awards and holdback agreements. Additionally, $16 million in restricted stock unit awards will be extended to continuing employees for retention purposes.
• Key Conditions or Agreements:
  • The acquisition is subject to customary adjustments.
  • The Habu team will help lead LiveRamp’s data collaboration strategy, reporting to LiveRamp’s Chief Revenue Officer, Vihan Sharma.
  • The transaction is expected to be completed in LiveRamp’s fiscal fourth quarter.
  • The transaction is not expected to have a material impact on LiveRamp’s fiscal 2024 revenue and non-GAAP operating income results.
  • The transaction is expected to negatively impact GAAP operating income due to higher non-cash stock compensation, purchased intangible amortization, and one-time transaction-related expenses.
  • Evercore is acting as the exclusive financial advisor to LiveRamp, and Baker McKenzie is acting as legal counsel to LiveRamp.
  • Goldman Sachs is acting as the exclusive financial advisor to Habu, and Gunderson Dettmer is acting as legal counsel to Habu.

Impact on Habu

The acquisition of Habu by LiveRamp is set to bring significant changes to Habu's operations and management. The Habu team will now play a crucial role in leading LiveRamp’s data collaboration strategy, reporting directly to LiveRamp’s Chief Revenue Officer, Vihan Sharma. This integration is expected to streamline operations, combining the strengths of both companies to enhance data collaboration capabilities. The merger will also relieve competitive tension between the two firms, allowing for a more unified approach to tackling industry challenges.

In terms of product offerings, the acquisition will create a more robust platform for data collaboration, combining Habu’s cross-cloud clean room technology with LiveRamp’s identity graph and data onboarding services. This unified platform will enable customers to measure campaigns across various media channels and connect data seamlessly across different environments. Employee reactions have not been explicitly detailed, but the positive outlook from management suggests a smooth transition. Customers have reacted favorably, with a significant influx of requests and a notable increase in LiveRamp's share prices, indicating strong market confidence in the acquisition.

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