Ad Deliverer DG Sells TV Business, Will Focus On Online

Ad delivery and trafficking company DG Monday announced the sale of its TV ad distribution operations and a plan to refocus its remaining business around the online advertising industry. The TV distribution business was sold to Extreme Reach Inc. for $485 million, and DG said the proceeds would be used to pay off debt and a cash distribution to shareholders of at least $3 per share, as well as new shares of an as-yet-to-be-named “new online company.”

The new online company will emerge with almost all of DG's working capital, including that attributed to both the online and television businesses,” the company said, estimating that to be about $40 million -- bringing the total value of its TV operations sale to $525 million. DG said it also committed to provide a potential equity investment of $40 million in cash in Extreme Reach, if necessary, to help complete the spinoff.

Commenting on the agreement, DG's Chairman, Scott Ginsburg, stated that the goal is "a more focused strategy to pursue opportunities in the emerging digital landscape."

"By concentrating exclusively on the digital market, the new online company can be laser-focused on meeting the challenges facing marketers due to the massive fragmentation of technologies and audiences," stated Neil Nguyen, CEO and president of DG.



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