• by Tyler Loechner  @mp_tyler, May 26, 2015

There are many facets to, and implications of, Verizon’s recent $4.4 billion acquisition of AOL, but a new “Schedule 14D-9” statement filed to the U.S. SEC sheds some light on what really went down as the two companies negotiated a deal.

Much of the other coverage of the recently released statement -- such as this item from Recode -- highlights the fact that AOL had three other suitors for a possible acquisition. But also woven into the statement is the nugget that AOL used its Platforms unit, headlined by its programmatic ad technology, as a major bargaining chip.

According to the statement, Verizon and AOL talks began last June. However, on December 1, 2014 and December 2, 2014, as representatives from Verizon and AOL discussed potential opportunities between the two companies, the discussions “focus[ed] primarily on [AOL’s] platforms business."

This increased interested in AOL’s platforms unit came less than a month after AOL reported its third-quarter 2014 earnings, in which it was revealed that programmatic accounted for 37% of AOL’s revenue during the quarter, up from just 12% during the same period in 2013.

The buoyed interest in AOL’s programmatic stack also came on the heels of Yahoo’s purchase of BrightRoll, Facebook's acquisition of LiveRail, and AOL’s own acquisition of Convertro, which it later used to help build an in-house data management platform (DMP).

All the while, as Recode and others have noted, other companies were reaching out to AOL about potential acquisitions, mergers or deals, and AOL’s ad tech was a hot topic in those conversations as well. In fact, on February 26, 2015, an unnamed company “contacted representatives of [AOL] and expressed interested in receiving information with respect to [AOL’s] platforms and brands businesses,” per the statement.

Perhaps because of the interest additional companies expressed in AOL, Verizon upped its ante. Verizon had previously not been interested in purchasing all of AOL, but on March 25, 2015, that changed. As talks heated up over the ensuing weeks and months, it’s clear that AOL was using its programmatic ad technology as a bargaining chip.

“In discussing valuation, [AOL’s] management continued to articulate the potential strategic benefits associated with combining [AOL’s] programmatic advertising platform and media content with Verizon’s mobile OTT offering, premium video content and end-to-end video delivery network,” the statement reads.

This phrase is used three times throughout the statement. On page 18 of the statement, it explicitly states that AOL “requested that Verizon increase its proposed price” in light of the synergies that would exists between AOL’s programmatic platform and Verizon’s mobile offerings.

Verizon had initially proposed a price of $47 per share, but through negotiations the price increased to $50. Tim Armstrong, chairman and CEO of AOL, tried once more to increase the price on May 9, 2015 — again by highlighting AOL’s programmatic platform — but a Verizon representative said they were staying put at $50.

With 78,574,804 outstanding shares, the price jump from $47 to $50 per share equated to roughly $235 million. That's more than double the $101 million AOL paid for Convertro last year, and over half the $405 million they paid for Adap.tv in 2013.