Digital media service provider DG FastChannel Inc. is acquiring privately held Pathfire Inc. for $30 million through a stock purchase transaction.
Pathfire, which generated revenues of about $16.2 million in 2006, distributes third-party long-form content through a proprietary server-based network via satellite and Internet channels. The Roswell, Ga.-based company is focused on distributing syndicated programming like "Jeopardy" and "The Oprah Winfrey Show," as well as news stories from ABC and CNN to their affiliates. Pathfire technology is installed in about 1,400 U.S. television stations.
The combined DG FastChannel and Pathfire networks will provide a one-stop source for all video forms including ads, news, syndicated programming, movies and video news releases and electronic press kits, according to the companies.
Scott K. Ginsburg, chairman and CEO of DG FastChannel said, "Pathfire's separate and distinct IP multicast digital satellite delivery network and blue chip customer list are excellent add-ons to DG FastChannel's business. Pathfire has a leading position in news, entertainment, and video news releases. These media segments greatly expand DG FastChannel's existing positions ..."
Dallas-based DG also recently purchased Point.360's advertising distribution operations. Ginsburg said upon completion of both acquisitions, DG FastChannel anticipates annual revenue of about $113 million to $118 million and EBITDA will be in the range of $35 million to $38 million.
"The strategic expansion of our electronic delivery platform will deliver further value to our shareholders, particularly in the era of high-definition television," Ginsburg said. "Over the next two years, television and cable outlets will transition primarily to HD broadcasts. Importantly, both the DG FastChannel network and the Pathfire network are already fully capable of electronically and securely transferring high-definition as well as standard-definition content to the broadcasters."
The transaction is expected to close in the second quarter of 2007.
