DG FastChannel(TM) Completes Acquisition Of GTN, Inc., for $11.5 Million and Sells Post Production Assets for $3.0 Million.Accretive Acquisition Accretive Acquisition An acquisition that will increase the acquiring company's EPS. Notes: As they are expected to increase the acquiring company's future earnings, these acquisitions tend to be favorable for the company's market price. Further Expands DG FastChannel's Ads Distribution Client Base and Revenues DALLAS -- DG FastChannel, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : DGIT), the leading provider of digital media services to the advertising, entertainment and broadcast industries, announced today that it has completed its previously announced acquisition of privately-held GTN GTN gestational trophoblastic neoplasia. , Inc., for $11.5 million, including approximately $1.5 million of GTN's working capital. Based in Detroit, GTN serves the advertising community through a comprehensive range of advertising media services including distribution for standard definition (SD) and high definition (HD) commercials, asset management, archival and production and post-production, services. Following the closing of the acquisition, DG FastChannel divested GTN's post-production assets and operations for $3.0 million in cash. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma for the sale of post-production assets and operations, GTN's ads distribution operations generate approximately $6.0 million in annual revenue. Management expects that the gross operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: and operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. margins of the acquired business will be relatively consistent with the levels achieved by the Company in its recent 2007 financial results. As such, DG FastChannel believes the transaction will be immediately accretive to its operating results. DG FastChannel financed the transaction through borrowings under its existing revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility. Commenting on the acquisition, Scott K. Ginsburg, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of DG FastChannel said, "Like our other recently completed transactions, this acquisition is strategically and financially compelling. Strategically, GTN strengthens DG FastChannel's presence in Detroit and the business combination brings talented personnel with strong automotive industry and local agency relationships to DG FastChannel. GTN's marquee clients include top automotive advertisers and Detroit-based advertising agencies focused on the automotive advertising market. "GTN's ads distribution operations generate attractive EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become margins and we have identified opportunities for operational and cost synergies as we integrate our Detroit offices. The subsequent sale of the post-production operations results in a net purchase price for the ads distribution business of $8.5 million. Our shareholders will again benefit from our proven ability to combine complementary businesses to drive superior returns." About DG FastChannel, Inc. DG FastChannel (DGIT: Nasdaq) is the leading provider of next generation workflow solutions, digital media technology and delivery services to America's most esteemed brands. The Company's delivery network reaches over 21,000 television and radio stations, cable and TV networks, cable outlets and newspapers. DG FastChannel's service and proprietary product set are integrated to provide content providers, including brands and commercial production entities, news organizations, syndicated programmers, and video news release producers and broadcasters end-to-end digital solutions that maximize efficiency while reducing costs. DG FastChannel's advanced capabilities include online delivery of high-definition (HD) content, re-purposing of broadcast video for the Internet, management of digital assets, and ubiquitous satellite and Internet reach resulting in the industry's highest levels of reliability, speed and quality. For more information visit www.dgfastchannel.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for Forward-Looking Statements Statements in this press release may contain certain forward-looking statements relating to DG FastChannel and its expectations for GTN's advertising distribution operations. All statements included in this press release concerning activities, events or developments that DG FastChannel expects, believes or anticipates will or may occur in the future are forward-looking statements. Actual results could differ materially from the results discussed in the forward-looking statements. Forward-looking statements are based on current expectations and projections about future events and involve known and unknown risks, uncertainties and other factors that may cause actual results and performance to be materially different from any future results or performance expressed or implied by forward-looking statements, including the following: the risk that operations will not be integrated successfully; the risk of adverse changes in the economic environment; and the risk that the expected cost savings and other synergies from the transaction may not be fully realized, realized at all or take longer to realize than anticipated. Additional information on these and other risks, uncertainties and factors is included in DG FastChannel's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. , Current Reports on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. and other documents filed with the SEC. |
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