DG Acquires Ad Technology Company MediaMind

Today, looking to expand beyond the capabilities of its broadcast TV ad distribution network as well as its Unicast division, DG (formerly DG FastChannel) acquired online ad technology company MediaMind for $414 million in cash and stock. Chairman and CEO Scott Ginsburg claimed in the release, “This is a game-changing transaction that provides DG with an unmatched global footprint, broad customer reach and an innovative platform in television and the fast-growing online advertising market.” Read more.

MediaMind’s rich media creative tech as well as digital ad serving capabilities would appear to position DG for a much deeper – they had Unicast online already – commitment to cross-channel delivery of advertising.

Also, MediaMind’s ad serving products have gained traction internationally and this gives DG an increased global footprint. To give a sense of scale, MediaMind said in its last quarterly earnings statement that it expects revenues to be around $100 million and $10 million in profit – give or take a million.

So, $100 million in revs, gets a $414 million exit, or next step, for MediaMind. Will MediaMind tech lead DG going forward? DG has a bunch of different business units related to ads and distribution, and it will be interesting to see how things come together.

DG has a market cap of ~$762 million today and first quarter earnings highlights (for the quarter ended March 31, 2011) included:

“Revenue for the three months ended March 31, 2011 increased 19% to $64.7 million compared to $54.2 million in the same period of 2010. First quarter Adjusted EBITDA increased 22% to $29.4 million compared to $24.1 million for the same period of 2010.”
“First quarter revenue from the Company’s Internet media service division, Unicast, increased 18% from the year earlier period.”
“First quarter revenue from the delivery of HD advertising content increased 64% to $32.4 million from the year earlier period.”