What happened

Shares of Telaria (NYSE:TLRA) popped on Thursday, rising about 13% by 12:50 p.m. EST. The stock's gain followed news that Telaria and Rubicon Project (NYSE:RUBI) have agreed to join forces and form a single sell-side platform for their customers to optimize digital ad inventory programmatically. Shares of Rubicon were up about 9%.

Combining to make the world's largest sell-side platform, the companies expect the new entity to see cost savings and accelerated growth in the fast-growing connected-TV market.

A chart showing a stock price moving higher

Image source: Getty Images.

So what

In a stock-for-stock deal of 1.082 Rubicon shares for each Telaria share, the two companies hope to merge and offer "a single platform for transacting Connected TV (CTV), desktop display, video, audio, and mobile inventory across all geographies and auction types," they said in a joint press release on Thursday.

"The combination of Rubicon Project and Telaria will establish the world's largest, independent sell-side advertising platform with scale, capabilities and solutions unmatched by the competition," said Rubicon CEO Michael Barrett, who is slated to be the CEO of the combined company.

Telaria CEO Mark Zagorski, who will be the chief operating officer of the new tech company, believes efficiencies from the deal will allow it to accelerate its growth, "providing additional resources to increase investment and continue to scale our industry-leading CTV technology."

Now what

Together, the two companies will have $150 million of cash, no debt, and strong double-digit revenue growth based on trailing-12-month figures ending Sept. 30, 2019. Telaria and Rubicon forecast cost synergies of $15 million to $20 million annually.

The deal is expected to close sometime in the first half of 2020.