Analyst provides some insight on LIN's Nami buy

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LIN Media didn’t provide any financial information when it announced the purchase of a majority stake in Nami Media, so it was obviously not a “material event” under SEC rules. Analyst Marci Ryvicker at Wells Fargo Securities has come up with a little more information about the deal.


The analyst told clients that LIN (stock ticker TVL) acquired a 50.1% ownership position in Nami Media, which is a private company focused on online traffic quality management.  “Specifically,” she noted, “Nami allows advertisers and publishers to improve the effectiveness of online advertising campaigns by qualifying quality website traffic and providing a marketplace to buy and sell ad inventory.”

Ryvicker said she believes this was a small, add-on investment. Her estimate that the total investment by LIN was less than $5 million, which will be paid from cash on hand. LIN had $37.6 million in its coffers at the end of Q3. “Given that TVL is taking a controlling majority stake in this company, the operations will be consolidated but we do not believe there will be a material impact (potentially 1-2% of total revenues next year),” the analyst concluded.

As RBR-TVBR noted, the acquisition makes sense as an add-on to RMM, which LIN bought in 2009. “Now TVL is buying Nami, which fits well with RMM – specifically with regards to the ‘volume’ business – selling inventory on behalf of publishers and advertisers. Nami allows RMM to provide ‘cost per click’ as well as the capability to evaluate website traffic in real time, to increase the effectiveness of their online advertising,” Ryvicker explained.

“We view this as a small, tuck-in acquisition that provides more evidence that TVL thinks ‘outside the box’ more than its peers,” Ryvicker told clients. “Operationally, TVL is one of our favorite TV broadcasters,” she added, but noted that she has remained on the sidelines as far as the stock is concerned because of the questions associated with its NBC joint venture in Dallas and San Diego.

RBR-TVBR observation: The key to this deal – thinking ‘outside the box’ more than its peers.