Yahoo! (YHOO) Deal to Acquire BrightRoll at 6.4x Revenues Could Drive Peers Higher - Needham & Company

Needham & Company analyst Kerry Rice sees Yahoo! (NASDAQ: YHOO) acquisition of BrightRoll for $640 million in cash lifting shares of other online advertising companies, such as YuMe (NYSE; YUME), Millennial Media (NYSE: MM), Tremor Video (NYSE; TRMR), and TubeMogul (NASDAQ: TUBE).

"Yahoo expects BrightRoll to contribute net revenue of $100M in 2014, which translates into a 6.4x sales multiple, much higher than the average of its peers which trade below 1.0x sales, except for TubeMogul at 5.7x," Rice notes.

Rice also notes that Facebook (NASDAQ: FB) recently acquired a BrightRoll competitor, LiveRail for $400-$500M, which also has revenue near $100M.

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