Extreme Reach to buy Digital Generation's TV business $485m
The transaction, which is subject to approval by DGIT's shareholders, is expected to be accomplished in two steps: DGIT will distribute its online business to DGIT shareholders in the form of a new publicly-traded company, and Extreme Reach will acquire the remaining DGIT business pursuant to a cash merger.
The acquisition is expected to be financed by a combination of existing cash, debt financing to be arranged by J.P. Morgan and SunTrust Robinson Humphrey, and new equity from existing investors of Extreme Reach. Spectrum Equity, which invested $51 million in Extreme Reach in May 2013, has agreed to invest up to an additional $47 million to facilitate the acquisition.
Extreme Reach will acquire all of DGIT's TV-centric business units, (collectively called Video Fusion) including DG's broadcast distribution and production services businesses. DGIT will no longer offer broadcast-related services and will shift its focus to its online media and services businesses, including MediaMind. ■