Dive Brief:

• Data collaboration platform LiveRamp is acquiring data clean room software provider Habu in a cash and stock transaction valued at approximately $200 million, the companies announced.
• The acquisition will help LiveRamp offer data collaboration at scale, across clouds and walled gardens, enabling brands and media companies to securely share first-party data with business partners and publishers to create more personalized marketing campaigns.
• The deal underscores the continued importance of data clean rooms and tools that promote secure data collaboration as Google has begun its long-delayed process of deprecating cookies.

Dive Insight:

As the cookieless future draws nearer, brands and agencies are exploring alternative tactics to identify consumers and gain insights into their behavior — necessary steps in creating the kind of personalized campaigns many have come to expect. Among the alternatives are data clean rooms, the cloud-based secure systems that enable data sharing and collaboration in a secure, pseudo-anonymized setting.

One-third of companies are currently using data clean rooms extensively, and roughly 90% expect their use of data clean rooms to increase over the next 12 months, according to a recent study from Deloitte Digital. Meanwhile, 70% of companies planning to use data clean rooms expect to outsource some of the implementation and operations. LiveRamp’s acquisition of Habu is a bid to capture a larger share of the growing data clean space. 

“Through this acquisition, we will further empower our customers to unlock insights, use cases, and revenue streams by seamlessly connecting data and deepening measurement, across any platform or partner they prefer,” said Scott Howe, CEO of LiveRamp, in a statement.

The acquisition will enable LiveRamp’s customers to streamline and simplify cross-cloud collaboration, achieve a single view of measurement, access enhanced identity and connectivity solutions, and advance AI initiatives through greater access to train and optimize machine learning, according to press details.

Over the longer term, the acquisition is expected to add value through greater cross-selling and upselling, new customer acquisition, accelerated global expansion and new use cases across the enterprise.

Under the deal’s terms, LiveRamp will acquire Habu for approximately $200 million, including $170 million in cash and the remainder in the form of stock. An additional $16 million of restricted stock will be extended to retain Habu’s employees. LiveRamp expects the acquisition to deliver $18 million in revenue in its 2025 fiscal year.

Along with the acquisition announcement, LiveRamp provided preliminary results for its third quarter of fiscal year 2024, which ended on Dec. 31, 2023. For the quarter, the company expects to report $174 million in revenue, an increase of 10% year-on-year and ahead of the previous guidance of $165 million. The company’s operating income is expected to be $15 million, ahead of the prior expectation of $8 million.

Correction: This article has been updated to clarify that LiveRamp is a data collaboration platform.