Extreme Reach to acquire DG’s once-dominant ad distribution business

Extreme Reach, a provider of software that supports the simultaneous delivery and tracking of a single commercial across TV, online and mobile advertising, has agreed to acquire the once-dominant advertising distribution business unit of Digital Generation (DGIT), formerly known as DG Fastchannel. The $485 million cash deal will be completed in the first quarter of 2014.

Under the terms of the agreement, Extreme Reach will acquire all of DGIT’s TV-centric business units, (collectively called Video Fusion) including DG’s broadcast distribution and production services businesses. DGIT will no longer offer broadcast-related services and will instead shift its focus to its online media and services businesses, including MediaMind.

Offering speed, reliability and massive scalability, the Extreme Reach platform combines the management, delivery and analytics of advertising across all video media in the file-based domain. DGIT’s nationwide infrastructure (with its roughly 5000 clients) reported revenue of $92 million for the quarter ending March 31, 2013.

John Roland, CEO of Extreme Reach, said the acquisition fits with its overall strategy to support the delivery of digital video advertising in a multidistribution platform world. “This acquisition is a major step in that direction,” he said.

The transaction, which is subject to approval by DGIT’s shareholders, is expected to be accomplished in two contemporaneous steps: DGIT will distribute its online business to DGIT shareholders in the form of a new publicly traded company, and Extreme Reach will acquire the remaining DGIT business pursuant to a cash merger.

The Extreme Reach video platform enables the seamless management, delivery and measurement of multiscreen advertising campaigns. The company’s crossmedia video ad delivery network serves more than 3000 advertisers and agencies. The company is headquartered in Needham, MA, with offices in New York; Chicago; Burbank, CA; Detroit; Toronto; San Francisco; Dallas; Seattle and Louisville, TN. DGIT maintains offices in many of the same cities, as well as several others.