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Digital Generation, Inc. (DGIT)
Sale of TV Asset Conference
August 13, 2013 8:30 am ET
Craig E. Holmes - Chief Financial Officer and Principal Accounting Officer
Neil H. Nguyen - Chief Executive Officer, President, Director and Member of Executive Committee
Darren Aftahi - Northland Capital Markets, Research Division
Richard Ingrassia - Roth Capital Partners, LLC, Research Division
Previous Statements by DGIT
» Digital Generation Management Discusses Q2 2013 Results - Earnings Call Transcript
» Digital Generation's CEO Hosts Investor Day Conference (Transcript)
» Digital Generation Management Discusses Q1 2013 Results - Earnings Call Transcript
Craig E. Holmes
Thank you, operator, and good morning, everyone, and welcome to our call to discuss the announcement to sell DG's TV asset. As the operator mentioned, I am Craig Holmes, and also joining the call today is Neil Nguyen, our CEO and President. This morning, we will have remarks from Neil regarding the transaction and then I will have brief comments regarding some of the additional details around the agreement, and then we will both be available to answer your questions.
So last night, DG issued a press release announcing the sale of the company's TV assets to Extreme Reach. The release is available on the company's website at www.dgit.com. This call is being broadcast live over the Internet, and the audio of the call will be available on the Investor Relations page of the company's website. So I'd like to remind everyone that the conference call will contain forward-looking statements that are not historical facts but rather are based on the company's current expectations and beliefs. DG's actual results may differ materially from these forward-looking statements. Please refer to the company's SEC filings for detailed information.
Now I'll turn the call over to Neil.
Neil H. Nguyen
Good morning, everyone, and thank you for joining us today. As you may have read the press release distributed last evening, DG has entered into a merger agreement subject to stockholder and regulatory approval, by which we have agreed to sell our television business to Extreme Reach for $525 million. The cash will be used to pay down DG's bank debt and provide a distribution to shareholders currently estimated to be at least $3 per share. We believe this transaction will create shareholder value. The online business will emerge as a new public company owned by DG shareholders with most of DG's working capital and cash on hand.
I'm excited about this transaction, and I'm confident that this is the best way forward for both the online and television businesses to maximize their potential. Clearly a difficult decision, DG has been a leader in revolutionizing the TV industry from physical tape distribution to establishing the leading digital TV delivery platform. We oversaw the transition from 2-inch tape to gigabyte high-definition files. Our clients continue to recognize the benefit of one of the most efficient solutions to distribute high-quality broadcast content that covers everything from a Super Bowl spot to infomercial, as well as high-definition, long-form syndicated programming.
While we acquired MediaMind in July 2011 and strategically moved to combine our TV asset with the leading independent online platform, we acted proactively towards the industry trend of convergence and digital across all media platforms. It's important to recognize that today's announcement does not abandon this belief and the role we expect to play within the convergence of media and emerging TV-related digital channel. With the continued transition to digital everywhere and connected everything, we are even more committed to video across all media channels and believe that ultimately, linear programming content will be delivered over IP. This will allow us to continue to support our clients in leveraging our technology platform in much the same way we have helped clients in display and online video today.
In the near term, fragmentation of audience across media channels and connected devices continues to accelerate, and The New Online Company built on the foundation of a fully integrated MediaMind, EyeWonder, Unicast and Peer39 will be laser-focused on unifying campaign execution, targeting optimization, attribution and delivering insights across all digital channels. Media will continue to be a big part of our focus across all connected screens, as well as continuing to build out our mobile, display and social strategy, where data provides the core differentiator. Many of the core capabilities that are part of results in the online business today in 2013 do not change.
Our platform approach is designed to reduce complexity in digital campaign management, our developing position to deliver multichannel campaigns through display, video, mobile and social; our commitment to open standards, allowing partners to choose our leading point solutions that integrate seamlessly across any platform; our global reach with local understanding, which is particularly important in the emerging markets; our growing presence in problematic buying; and lastly, our independence. We have heard time and again from our customers that our neutrality allows them to manage their most important asset, data, and successfully work across the publisher landscape without concern that their data is shared with competitors.
You would hear much more from us in the coming months about how our online focus unencumbered by debt broadens the opportunity in front of DG's online assets. Our reach has never been greater as we connect over 14,000 advertisers in over 70 countries around the world. We're confident this global footprint, combined with the best-in-class technology, uniquely positions The New Online Company to help marketers meet the challenges of connecting with their consumers in an increasingly fragmented digital world.