Extreme Reach Completes Acquisition of DGIT’s TV Advertising Business for $485 Million
NEEDHAM, MA – Extreme Reach, Inc., the leading video platform for integrated TV, online and mobile video advertising, announced today that it has completed its acquisition of the TV business of Digital Generation, Inc. (DG, NASDAQ: DGIT) for $485 million in cash. The combined company has revenues of $270 million and over 750 employees.
DG was a leading provider of distribution solutions for television advertising. Its offices and personnel will be immediately integrated into Extreme Reach. All DG TV customers and assets will be transitioned onto the Extreme Reach cloud platform. DG customers will immediately benefit because the platform offers greater efficiency, speed and reliability over the satellite and tape distribution model.
The Extreme Reach digital network is the world's largest and includes over 7,000 North American TV media destinations and thousands of online video publishers. The company's platform enables the execution of TV and online video advertising campaigns across every screen and device. Extreme Reach is also a leader in talent and rights management. The tabulation and management of talent royalties is automatic and completely integrated into the Extreme Reach platform and all online advertising and talent capabilities are immediately available to all former DG clients.
"DG provided TV distribution solutions to nearly 6,000 advertisers and agencies," said John Roland, CEO of Extreme Reach. "Our combined client base of over 9,000 includes most of the largest TV advertisers and all of their TV ads are now managed on our platform. This acquisition underscores our aggressive growth strategy and solidifies our position as the TV and online video advertising convergence leader. We provide thousands of advertisers and agencies with the most effective way possible to leverage their video advertising across every screen and device."
DG operated offices and broadcast advertising service facilities in thirteen markets across North America with headquarters in Irving, Texas. Prior to the acquisition, Extreme Reach also operated offices and facilities in seven of those markets. Extreme Reach headquarters is located in Needham, MA.
Tim Conley, COO of Extreme Reach said, "Now that this acquisition is complete, we're excited to welcome DG's experienced team to Extreme Reach. We couldn't be happier about our growing Service team. And, by bringing our offices together in seven shared markets, we're able to leverage new synergies and enable greater efficiencies for all of our clients."
The acquisition was financed by a combination of existing cash, debt financing and new equity from existing investors of Extreme Reach. Spectrum Equity, which invested $51 million in Extreme Reach in May 2013, invested an additional $35 million. All other Extreme Reach investors also participated in the financing: Village Ventures, Greycroft Partners and Long River Ventures. Berenson & Company acted as exclusive financial advisor and Pierce Atwood LLP acted as legal advisor to Extreme Reach in the transaction. Choate, Hall & Stewart acted as legal advisor to Spectrum Equity. J.P. Morgan and SunTrust Robinson Humphrey acted as joint lead arrangers and joint book runners for the $465 million debt facility.