DG Systems to merge with FastChannel Network
DG Systems and FastChannel Network have entered into an agreement to merge in a tax-free, stock-for-stock deal with 36 million based upon the last reported sale price of DG Systems common stock. The merger of DG and FastChannel combines the industry's leading digital media service firms with television, radio, and print media distribution capabilities; online business intelligence offerings that include the world's largest searchable database of television advertisements; digital asset management tools for archiving and collaboration; and media intelligence offerings that include broadcast verification as well as competitive monitoring.
The details: FastChannel will merge with DG via the issuance of 52 million DG Systems' common shares to FastChannel stockholders. Additionally, DG will assume up to 10 million of FastChannel debt. DG expects to refinance its current debt after the transaction closes.
The combined company expects to report FY 2005 revenue of 83 million, comprised 58 million from DG Systems and 25 million from FastChannel.
Said Scott Ginsburg, DG CEO: "We believe the transaction will strengthen our core business as a leading provider of digital media distribution services while presenting new and incremental revenue opportunities. By combining these entities, we can deliver an extensive, unified service platform to the industry with unparalleled solutions and capabilities. At the same time, we expect to realize valuable operational, revenue and cost synergies as we select personnel, offices and technologies that fulfill our goal of offering customers advanced, cost-effective means of managing their advertising business and assets."
After the merger, Ginsburg will be Chairman and CEO of the combined company; FastChannel CEO John Roland will become President and COO; and DG Systems' CFO Omar Choucair will continue as CFO. DG Systems and FastChannel will each nominate three members of the Board of Directors of the combined company, with one additional independent director to be appointed.
The deal is expected to close late Q1 or early in Q2.
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