DG Agrees to Sell Television Business in Deal Valued at $525 Million

DG Agrees to Sell Television Business in Deal Valued at $525 Million 
DALLAS, TX -- (Marketwired) -- 08/12/13 --  DG(R) (NASDAQ: DGIT), the
world's leading ad management company, today announced that it has
entered into an agreement, which was unanimously approved by its
Board of Directors, to sell its television ad delivery business to
Extreme Reach, Inc. for $485 million. The proceeds will be used by DG
to pay off all outstanding debt and fund the majority of a planned
cash distribution to DG stockholders of at least $3 per share. In
addition, DG stockholders will receive a distribution of shares of a
company that will hold DG's online business ("The New Online
Company.") 
The New Online Company will emerge with almost all of DG's working
capital, including that attributed to both the online and television
businesses. Total working capital for the television business alone
at June 30, 2013 was approximately $40 million, excluding cash,
bringing the total economic value for the sale of the television
business to $525 million. A portion of the cash and working capital
at closing will help fund the anticipated cash distribution to
shareholders. The New Online Company's initial capital structure is
forecasted to have approximately $20 million of cash and $50-60
million of net working capital.  
In addition, DG committed to provide a potential equity investment of
$40 million cash in Extreme Reach ("ER"), if required, to close the
transaction. If DG's equity investment is ultimately required, at
closing, ER will provide DG with $45 million of preferred stock with
terms and conditions consistent with ER's most recent offering. If
such $40 million investment is not required, ER will pay DG an
additional $5 million in cash at closing and the incremental $45
million will then be available to fund stockholder distributions and
working capital for The New Online Company. 
Commenting on the agreement, DG's Chairman, Scott Ginsburg, stated,
"We are very pleased with the developments announced today. We
believe these proposed transactions will provide DG shareholders with
a significant cash distribution by monetizing DG's television
business, while providing shareholders a continued stake in the new
online business. These transactions also allow the Company to repay
all debt, strengthen our balance sheet and provide us with a more
focused strategy to pursue opportunities in the emerging digital
landscape."  
"By concentrating exclusively on the digital market, The New Online
Company can be laser-focused on meeting the challenges facing
marketers due to the massive fragmentation of technologies and
audiences," said Neil Nguyen, CEO and President of DG. "I am excited
about the opportunity to build upon the past few quarters' strong
momentum. Our global footprint, market leading campaign management
platform and analytics capabilities position us as a major player in
the future of digital advertising."  
BofA Merrill Lynch acted as financial advisor to DG in connection
with the transaction. Latham & Watkins LLP acted as legal advisor to
DG on the transaction.  
The transaction is expected to close during the first quarter of 2014
following DG stockholder approval and the expiration of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act.
Immediately prior to the merger, the outstanding DG shares will be
partially redeemed for new shares of The New Online Company which are
expected to be listed on the NASDAQ Global Market.  
These and other considerations will be set forth in greater detail in
a proxy and information statement that DG will file with the SEC and
distribute to stockholders in advance of a special meeting
anticipated to be held in the fourth quarter of 2013 to approve the
transaction. MacKenzie Partners Inc. is acting as the Company's proxy
solicitation and information agent in connection with the
transaction.  
Conference Call and Webcast 
The Company will host a conference call and webcast at 8:30 a.m. ET
on August 13, 2013 to discuss the transaction. To access the
conference call by telephone, interested parties may dial
800-510-0146 and enter passcode 87525582. International callers may
access the call by dialing 617-614-3449. Please call five minutes in
advance to ensure that you are connected. A replay will also be
available for seven days following the call. To access the replay,
interested parties may dial 888-286-8010 and enter passcode 76190609.
International callers may access the replay by dialing 617-801-6888.
Participants can access the webcast at www.dgit.com. For the webcast,
please allow 15 minutes to register and download any necessary
software. Questions and answers will be taken only from participants
on the conference call. Following the call's completion, a replay
will also be available for 30 days on the Company's website. 
Cautionary Note Regarding Forward-Looking Statements 
This press release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Any
statements that are not statements of historical fact (including
statements containing the words "believes," "plans," "anticipates,"
"expects," "estimates" and similar expressions) should also be
considered to be forward-looking statements. There are a number of
important factors that could cause actual results or events to differ
materially from those indicated by such forward-looking statements,
including: the ability to consummate the proposed transactions; the
ability to obtain the requisite regulatory or stockholder approvals
in a timely manner or otherwise; failure to satisfy other conditions
to consummation of the transactions; the ability of Extreme Reach to
consummate the necessary debt financing arrangements set forth in
financing letters received by Extreme Reach; the ability for The New
Online Company to achieve the benefits of the transactions or that
such benefits may take longer to realize than expected; changes in
government regulation; the ability to successfully separate
operations and employees; the potential impact of the announcement of
the transactions or consummation of the transactions on relationships
with employees, suppliers, customers and competitors; international,
national or local economic, social or political conditions that could
adversely affect the parties to the transactions or their customers;
conditions in the credit markets; and the parties' international
operations, which are subject to the risks of currency fluctuations
and foreign exchange controls and the other risks and uncertainties
that affect the parties' businesses, including those described in
DG's Annual Report on Form 10-K for the year ended December 31, 2012.
In addition, any forward-looking statements represent DG's estimates
only as of the date hereof and should not be relied upon as
representing DG's estimates as of any subsequent date. DG disclaims
any intention or obligation to update any forward-looking statements
as a result of developments occurring after the date of this press
release. 
Important Additional Information about the Merger and Where to Find
It 
In connection with the transactions contemplated by the merger
agreement, DG plans to file with the SEC and mail to its shareholders
a proxy and information statement in connection with the merger.
Additionally, DG will file other relevant materials with the SEC in
connection with the proposed transactions pursuant to the terms of
the merger agreement. Investors and shareholders are urged to read
the proxy and i
nformation statement and any other relevant documents
carefully when such documents are available. 
Investors and shareholders will be able to obtain free copies of the
proxy and information statement and other documents filed with the
SEC by DG when available through the web site maintained by the SEC
at www.sec.gov. 
In addition, investors and shareholders will be able to obtain free
copies of the proxy and information statement from DG by contacting
Investor Relations, Digital Generation, Inc., 750 West John Carpenter
Freeway, Suite 700, Irving, Texas 75039, (972) 581-2000. 
DG and its directors and executive officers may be deemed to be
participants in the solicitation of proxies in respect of relating to
the transactions contemplated by the merger agreement. Information
regarding DG's directors and executive officers is contained in DG's
Annual Report on Form 10-K and Amendment No. 1 to the Annual Report
on Form 10-K for the year ended December 31, 2012 as filed with the
SEC on March 15, 2013 and April 30, 2013, respectively. 
About DG  
DG (NASDAQ: DGIT) is the leading global multiscreen advertising
management and distribution platform, fueling campaign management
across TV, online, mobile and beyond. Through a combination of
technology and services, DG empowers brands and advertisers to work
faster, smarter and more competitively. Boasting the world's largest
hybrid satellite and Internet network for broadcast video delivery,
DG's unparalleled campaign management encompasses multiscreen ad
delivery, cross-channel research and analytics, and unified asset
management. The DG product portfolio consists of two overarching
product lines for online and video campaign management: MediaMind and
VideoFusion. 
With New York as a center of operations, DG is a global company that
connects over 14,000 advertisers and 7,400 agencies worldwide with
their targeted audiences through an expansive network of over 50,000
media destinations across TV broadcast and digital advertising in 78
countries, managing approximately ten percent of the world's media
assets. For more information, visit http://www.dgit.com. 
For more information contact: 
JoAnn Horne
Market Street Partners
415/445-3233 
Dan Burch / Laurie Connell 
MacKenzie Partners, Inc. 
212/929-5500 
 
 
Press spacebar to pause and continue. Press esc to stop.