Dentsu Aegis Network said today that a newly formed subsidiary, Aegis Lifestyle, had entered into a definitive agreement to acquire experiential marketing agency MKTG Inc. for approximately $52 million.
The transaction price represents a premium of 166% over MKTG's closing price of $1.05 as of May 23, 2014, the last trading date prior to the date of the purchase announcement.
DAN said the transaction is expected to be financed by cash on hand at Aegis Media Americas, which has guaranteed the payment obligations of Aegis Lifestyle under the definitive agreement.
"This acquisition represents a significant and important step forward for Dentsu Aegis Network in the U.S.," said Nigel Morris, CEO of Dentsu Aegis Network Americas. "We are very intentional about the brands we bring into our network, and MKTG's unique aptitude in creating face-to-face connections with consumers will help to further expand our network's vision, commitment and ability to help brands effectively navigate today's convergent media landscape."
"This all-cash, premium transaction provides significant and immediate value to our stockholders," said Charlie Horsey, MKTG's Chairman and Chief Executive Officer. Horsey added: " Dentsu Aegis Network's emphasis on innovating the way brands are built is a perfect complement to our mission to build communities around brands through innovation in experiential marketing. “
The transaction, which is expected to close during the third quarter of 2014, is subject to the approval of MKTG's stockholders,
customary closing conditions, and the requirement that MKTG have minimum available cash at closing of at least $8,000,000, less up to $2,000,000 in transaction expenses.
A special meeting of MKTG's stockholders will be held to consider the approval of the proposed merger after the preparation and filing of a proxy statement with the SEC.