DG, provider of digital media services to the advertising, entertainment and broadcast industries, and MediaMind Technologies Inc., a 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.
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.
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.
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. “
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.”