Digital advertising company MediaMind Technologies Inc. (Nasdaq: MDMD) will be acquired by digital media services DG FastChannel Inc. (Nasdaq: DGIT) for $517 million in cash.
DG said that the acquisition creates one of the premier global online and television advertising technology companies. The boards of directors of both companies have approved the acquisition. DG will commence a tender offer to purchase all of MediaMind's outstanding shares for $22 per share in cash, at an equity value of $517 million, including the company's $100 million in cash. The share price closed at $15.94 yesterday, giving a market cap of $303 million.
The company's largest shareholder is the Sycamore Fund owned by Eli Barkat, brother of Jerusalem Mayor Eli Barkat, which has a 20% stake in MediaMind and will receive $82 million. Insight Ventures holds a 16.5% stake and will receive $68 million. Former Koor CEO Jonathan Kolver holds a 5.7% stake and will receive $24 million. MediaMind held its IPO on Wall Street less than a year ago when it raised $57 million at a company value of $206 million.
After the acquisition is completed, MediaMind president and CEO Gal Trifon will become DG chief digital officer, and MediaMind chief solutions officer Ofer Zadikario will assume the same position at DG.
Trifon said, "We believe this transaction is the next step for MediaMind. DG will provide us with the added scale and resources to continue to grow our platform and enhance the services we provide our customers. Working together with DG, we will provide a single solution for advertising creation, distribution, and monitoring for cross-platform campaigns. We are excited to partner with DG to continue to increase our base of large advertisers and expand our global operations, and we are confident that our employees will benefit from the greater opportunities at the combined company."
DG president and COO Neil Nguyen said, "With this acquisition, we will build on MediaMind's global operational footprint and world class technology platform to expand our reach beyond North America. The combined companies will serve a global customer base and enable DG to penetrate such markets as Latin America, Asia and EMEA."
The two companies had over $100 million in digital advertising revenue on a pro forma basis in the year through the first quarter of 2011.
MediaMind operates in the fast-growing $71 billion global online advertising market. Headquartered in New York, MediaMind has 37 sales and representation offices covering 64 countries. In 2010, the company delivered campaigns for 9,000 brand owners using 3,800 media and creative agencies across 8,200 global web publishers in 64 countries.
The Israeli digital advertising company raised $57 million in an IPO on Nasdaq last August at a valuation of $206 million.