Shares of DoubleVerify (NYSE: DV), an advertising technology firm, are active following a major corporate development. The company provides services that measure the quality and effectiveness of digital ads for brands. It is now in the process of being acquired by Nielsen, a well-known company specializing in audience measurement and data analytics.
Nielsen Holdings announced its intent to purchase DoubleVerify in an all-cash transaction with an enterprise value of about $2.15 billion, as highlighted by the Wall Street Journal. According to the merger agreement, DoubleVerify shareholders will receive $13.60 per share. Nielsen is pursuing this deal to improve its ability to track streaming media.
Following this news, an analyst at Scotiabank downgraded DoubleVerify to "Sector Perform" from a previous "Outperform" rating. A price target is an analyst's projection of a stock's future price. The new price target was set at $13.60, which directly matches the price per share offered in the Nielsen acquisition.
When the new target was announced, DoubleVerify's stock was trading at a price of $11.71. The acquisition news caused the stock to jump nearly 14% in after-hours trading, moving its price closer to the deal value. This reflects investors reacting to the certainty of the acquisition price.
As a result of the pending acquisition, DoubleVerify is suspending all future earnings calls and withdrawing its financial guidance. This is a common step for companies during a merger. It ensures that the process moves forward smoothly without new financial information complicating the existing agreement.
