Software company LiveRamp Holdings (NYSE: RAMP)’s acquisition of startup Habu for $200 million in cash and stock was its largest in the last five years. In a market where SaaS M&A activity has been down, the deal also reflected LiveRamp’s willingness to fund a significant inorganic expansion opportunity.

San Francisco-based Habu was founded in 2019. The company offers a data clean room platform and has partnerships with Amazon Web Services, Azure, Google Cloud Platform, Databricks and Snowflake (NYSE: SNOW). Data clean rooms allow companies like Google, Facebook and Amazon to share aggregate, rather than individual, customer data with advertisers while maintaining privacy.

The transaction combines two of the largest data clean room service providers in the market. LiveRamp’s clients include Hulu, Google (Nasdaq: GOOG) and Walmart.

Market Concerns

The deal faced challenges from concerns about the market’s reception to large M&A transactions in the SaaS space. These concerns drove multiple revisions to the deal’s structure and timing. As this transaction represented a substantial portion of New York Stock Exchange-listed LiveRamp’s market capitalization, a significant amount of time was spent engineering the transaction terms and timing to maximize market reception.

Data Collaboration

The acquisition will help LiveRamp offer data collaboration at scale so brands and media companies can securely share first-party data to create personalized marketing.

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

“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, when the deal was announced.

For more Deals of the Year coverage, see Mergers and Acquisitions Names the 2024 Middle-Market Deals of the Year.