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Putting his money where his mouth is, AOL chief exec Tim Armstrong has brokered a deal to acquire video advertising startup Adap.TV for $405 million, according to an SEC document filed today.

Adap.TV provides a platform that matches up those wishing to buy video advertising spots with those that are selling the space for those ads. And since AOL has been touting video content and video ads as a big part of its business strategy over the last several quarters, today’s purchase of Adap.TV makes a lot of sense. AOL said Adap.TV supported more than 26,000 global ad campaigns across 9,500 websites in 2012.

AOL’s various video properties are currently among the top 10 most trafficked video destinations in the world, due in part to the convergence of the Huffington Post brand into an online video network (HuffPost Live) that’s similar in scope to a cable network, as well as its AOL On network of video content. AOL On has also consistently grabbed the second highest number of monthly video views in the U.S., according to comScore. AOL clearly has an abundance of premium video content (either produced in-house or distributed through content partnerships) that people are actually watching. Adap.TV’s technology should help boost revenue from “programmatic” ads (aka a self-serve option for clients to buy up large blocks of advertising spots), which is a main focus for Armstrong.

“Two trends are prevalent in the video space right now – the movement from linear television to online video and the shift from manual transactions to programmatic media buying,” Armstrong said in a statement. “ is positioned squarely in front of the huge opportunity these trends are presenting.”

Per terms of the deal, AOL is spending $322 million in cash for Adap.TV, with the remaining amount being paid in shares of AOL. That makes it AOL’s largest acquisition under Armstrong’s leadership, beating out the company’s 2011 acquisition of Huffington Post for $315 million. Adapt.TV will also continue to operate independently as part of AOL’s overall package of video resources for content publishers and advertising partners. AOL said it expects to finalize the acquisition deal in Q3 2013.

Founded in 2006, San Mateo, Calif.-based Adap.TV had previously raised $48.5 million in funding from Spark Capital, Redpoint Ventures, Gemini Israel Funds, and others. Adap.TV was also said to be planning a possible initial public offering in the near future, but tabled those plans in the wake of Wall Street’s dismal response to other video industry companies, as AllThingsD‘s Peter Kafka points out.

The Adap.TV acquisition news was announced alongside AOL’s Q2 2013 earnings results, which saw the company’s ad revenue increase 7 percent across all categories to $361.2 million compared to the same period last year. Overall revenue was up 2 percent to $541.3 million compared to the same period last year. You can read AOL’s full earnings report here.

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