DG® (NASDAQ: DGIT), a leading provider of digital media services
to the advertising, entertainment and broadcast industries, and
MediaMind Technologies Inc. (NASDAQ: MDMD), a leading global
provider of integrated digital advertising solutions, today
announced a definitive agreement under which DG will acquire
MediaMind in an all-cash transaction. The acquisition creates one
of the premier global online and television advertising technology
companies.
MediaMind is a unique asset, with tremendous people, products
and services in the fast-growing $71 billion global online
advertising market1 with a superb international footprint and broad
agency relationships. Headquartered in New York, MediaMind has 37
sales and representation offices covering 64 countries. In 2010,
MediaMind delivered campaigns for 9,000 brand owners using
approximately 3,800 media and creative agencies across 8,200 global
web publishers in 64 countries.
Under the terms of the transaction, which has been approved by
the boards of directors of both companies, DG will commence a
tender offer to purchase all of MediaMind’s outstanding shares for
$22.00 per share in cash. The total transaction value is $517
million equity value or $414 million enterprise value, taking into
account over $100 million in cash on MediaMind’s balance sheet. The
board of directors of MediaMind will recommend that MediaMind
shareholders tender their shares in the tender offer. The
transaction is expected to be accretive to DG’s non-GAAP EPS in
2012.
Upon closing, Gal Trifon, President and CEO of MediaMind, will
serve as DG’s Chief Digital Officer, leading DG’s online
advertising business. Additionally, Ofer Zadikario, MediaMind’s
Chief Solutions Officer, will join DG in the same position.
“This is a game-changing transaction that provides DG with an
unmatched global footprint, broad customer reach and an innovative
platform in television and the fast-growing online advertising
market,” said Scott Ginsburg, Chairman and CEO of DG. “MediaMind’s
online business excels in rich media and fits well with our
unparalleled distribution platform for high value broadcast content
– enabling advertisers to most effectively connect with audiences
globally. With its new global reach and enhanced product offerings,
DG will gain critical mass and will have the unique ability to
provide a suite of cross-platform advertising management and
distribution services.”
Mr. Trifon said, “We believe this transaction offers significant
value for our shareholders and is the natural, next step for
MediaMind. DG will provide us with the added scale and resources to
continue to grow our platform and enhance the services we provide
our customers. Working together with DG, we will provide a single
solution for advertising creation, distribution, and monitoring for
cross-platform campaigns. We are excited to partner with DG to
continue to increase our base of large advertisers and expand our
global operations, and we are confident that our employees will
benefit from the greater opportunities at the combined
company.”
Neil Nguyen, President and COO of DG said, “We are extremely
pleased about this transaction, which greatly accelerates our
international and digital growth strategy. With this acquisition,
we will build on MediaMind’s global operational footprint and world
class technology platform to expand our reach beyond North America.
The combined companies will serve a global customer base and enable
DG to penetrate such markets as Latin America, Asia and EMEA.
Moreover, with our combined advertiser and publisher reach, we will
be well positioned to gain additional market share and innovate
cross platform solutions in order to drive long-term growth. We
welcome Gal, Ofer and their team to DG and look forward to working
together to realize the significant potential of our combined
organizations.”
For the twelve months ending March 31, 2011 the companies had in
excess of $100 million in digital advertising revenue on a pro
forma basis. With the MediaMind acquisition, DG expects to realize
approximately $15 million in cost synergies identified to date,
with clear opportunities for enhanced revenue growth. The
transaction will be funded by a combination of available cash and
fully committed debt financing from JPMorgan Chase & Co. and
Bank of America Merrill Lynch. MediaMind shareholders holding
approximately 8.2 million common shares outstanding and 1.8 million
options, as well as certain officers and pre-IPO investors, have
agreed to tender their shares in the offer.
Goldman Sachs & Co. and Bank of America Merrill Lynch acted
as financial advisors and Latham & Watkins provided legal
advice to DG. Qatalyst Partners acted as financial advisor and
Davis, Polk & Wardwell LLP provided legal advice to MediaMind.
Subject to the successful completion of the tender offer,
regulatory approval and customary closing terms and conditions, the
transaction is expected to close in the third quarter 2011.
Financial Community Webcast
On Thursday, June 16, 2011 at 8:30 a.m. ET, DG and MediaMind
will host a conference call and webcast. The webcast is open to the
general public and all interested parties may access the live
webcast on the Internet at the Company’s websites at www.DGit.com
or ir.mediamind.com. Please allow 15 minutes to register and
download or install any necessary software. Participants should log
in 15 minutes ahead of time to test your browser and register for
the call. For dial in access, please dial (800) 894-5910, within
the U.S., or (785) 424-1052 outside the U.S. Enter passcode
8168027. In addition, a recording of the conference will be
available for replay two hours after the call's completion for two
weeks. To access the recording, please dial (888) 203-1112, within
the U.S., or (719) 457-0820 outside the U.S. Enter passcode
8168027.
About DG
DG FastChannel®, Inc. (now known as DG) provides innovative
technology-based solutions to the advertising, broadcast and
publishing industries. The Company serves more than 5,000
advertisers and agencies through a media distribution network of
more than 28,000 radio, television, print and Web publishing
destinations throughout the United States, Canada and Europe. DG
utilizes satellite and internet transmission technologies, creative
and production resources, digital asset management and syndication
services that enable advertisers and agencies to work faster,
smarter and more competitively. Through its MIJO, Unicast,
SourceEcreative, Treehouse and Springbox operating units, DG
extends its benchmark of excellence to a wide roster of services
ranging from custom rich media solutions and interactive marketing
to direct response marketing and global creative intelligence. For
more information, visit www.DGit.com.
About MediaMind
MediaMind is a leading global provider of digital advertising
campaign management solutions to advertising agencies and
advertisers. MediaMind provides media and creative agencies,
advertisers and publishers with an integrated platform to manage
campaigns across digital media channels and a variety of formats,
including rich media, in-stream video, display and search.
Headquartered in New York, MediaMind delivered during 2010
campaigns for approximately 9,000 brand advertisers, servicing
approximately 3,800 media agencies and creative agencies across
approximately 8,200 global web publishers in 64 countries
throughout North America, South America, Europe, Asia Pacific,
Africa and the Middle East. For more information on MediaMind,
visit http://www.mediamind.com.
Additional Information
This press release is neither an offer to purchase nor a
solicitation of an offer to sell securities. The tender offer for
the outstanding shares of MediaMind common stock described in this
press release has not yet commenced. At the time the planned offer
is commenced an affiliate of DG will file a tender offer statement
on Schedule TO with the Securities and Exchange Commission (the
"SEC") and MediaMind will file a solicitation/recommendation
statement on Schedule 14D-9 with respect to the planned offer. The
tender offer statement (including an offer to purchase, a related
letter of transmittal and other offer documents) and the
solicitation/recommendation statement will contain important
information that should be read carefully before any decision is
made with respect to the tender offer. Those materials will be made
available to MediaMind stockholders at no expense to them. In
addition, all of those materials (and all other offer documents
filed with the SEC) will be available at no charge on the SEC's Web
site: www.sec.gov.
DG Forward-Looking Statements
This release contains forward-looking statements relating to the
Company. These forward-looking statements involve risks and
uncertainties, which could cause actual results to differ
materially from those projected. Such risks and uncertainties
include the Company’s ability to integrate recent acquisitions and
other risks relating to DG’s business which are set forth in the
Company’s filings with the Securities and Exchange Commission. DG
assumes no obligation to publicly update or revise any
forward-looking statements.
MediaMind Forward-Looking Statements
This press release contains statements that constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements other than
statements of historical facts are forward-looking statements.
These statements include descriptions regarding the intent, belief
or current expectations of MediaMind or its officers with respect
to the future consolidated results of operations and financial
condition of MediaMind, the continued global growth of digital
advertising, MediaMind's ability to continue to gain market share
and capitalize on the anticipated global growth of digital
advertising and MediaMind's ability to execute its strategic plans,
including consummation of the M&A transaction announced herein.
Such forward-looking statements are not guarantees of future
performance and involve known and unknown risks, uncertainties, and
other factors that may cause actual results, performance or
achievements to be materially different from those expressed or
implied in the forward-looking statements as a result of various
factors and assumptions, including factors discussed under the
heading “Risk Factors” in our final prospectus related to our
initial public offering filed on August 12, 2010, our Annual Report
on form 10K filed on March 8, 2011 and additional reports we file
with the Securities and Exchange Commission.
Non-GAAP Reconciliation, Adjusted EBITDA, Non-GAAP Net Income
Definitions
In addition to providing financial measurements based on
generally accepted accounting principles in the United States of
America (GAAP), the Company has historically provided additional
financial measures that are not prepared in accordance with GAAP
(non-GAAP). Legislative and regulatory changes discourage the use
of and emphasis on non-GAAP financial measures and require
companies to explain why non-GAAP financial measures are relevant
to management and investors. We believe that the inclusion of these
non-GAAP financial measures in this press release helps investors
to gain a meaningful understanding of our past performance and
future prospects, consistent with how management measures and
forecasts our performance, especially when comparing such results
to previous periods or forecasts. Our management uses these
non-GAAP financial measures, in addition to GAAP financial
measures, as the basis for measuring our core operating performance
and comparing such performance to that of prior periods and to the
performance of our competitors. These measures are also used by
management in its financial and operational decision-making. There
are limitations associated with reliance on these non-GAAP
financial measures because they are specific to our operations and
financial performance, which makes comparisons with other
companies’ financial results more challenging. By providing both
GAAP and non-GAAP financial measures, we believe that investors are
able to compare our GAAP results to those of other companies while
also gaining a better understanding of our operating performance as
evaluated by management.
The Company defines “non-GAAP net income” as net income before
amortization of intangible assets, impairment charges and
share-based compensation expense. All amounts excluded from “non
GAAP net income” are reported net of the tax benefit these expenses
provide.
The Company considers non-GAAP net income to be another
important indicator of the overall performance of the Company
because it eliminates the effects of events that are non-cash, or
are not expected to recur as they are not part of our ongoing
operations.
Non-GAAP net income should be considered in addition to, not as
a substitute for, the Company’s operating income and net income, as
well as other measures of financial performance reported in
accordance with GAAP.
Reconciliation of Non-GAAP Financial Measures
In accordance with the requirements of Regulation G issued by
the Securities and Exchange Commission, the Company is presenting
the most directly comparable GAAP financial measures and
reconciling the non-GAAP financial measures to the comparable GAAP
measures.
1 Kathy Crosett, “Global Ad Market to Make Full Recovery in
2011,” Marketing Forecast, January 31, 2011
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