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Extreme Reach Snaps Up DG’s TV Ad Business For $485M

Combined Multiscreen Ad Firm Has Annual Revenues Of $270 Million 2/11/2014 10:23 AM Eastern

Extreme Reach, maker of a video ad platform spanning TV, online and mobile, said Tuesday that it had wrapped up its acquisition of Digital Generation Inc.’s TV business for $485 million in cash.

The companied company will has annual revenues of $270 million and more than 750 employees, they said.

With the deal done, all DG TV customers and assets will be transferred to the Extreme Reach multi-screen, cloud-based ad platform, which, according to the company, supports more than 7,000 “TV media destinations” in North America and thousands of online video publishers.

Extreme Reach said the deal will enable its platform to achieve greater scale

"DG provided TV distribution solutions to nearly 6,000 advertisers and agencies," said John Roland, CEO of Extreme Reach, in a statement. "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”

Irving, Texas,-based DG operated offices and ad service facilities in 13 markets in North America. Prior to the deal, Extreme Reach, which is headquartered in Needham, Mass., also operated in seven of those markets.

Major brands that are clients of the newly combined company include Coca-Cola, Geico, Walmart, Ford, Google, L’Oreal, Samsung, Microsoft, NBCUniversal, Bank of America, Nascar, Hyundai, Discover, Kia, Sears and Heineken, among others.

Extreme Reach said it financed the deal through a combo of existing cash, debt financing and new equity from existing investors. Of that group, 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.

 

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April