Point.360 merges with DG FastChannel
April 17 (SmallCapInvestor.com) – Shares of Burbank, Calif.-based Point.360 (Nasdaq: PTSX) established a new 52-week high after news the company is selling its advertising distribution operations to DG FastChannel Inc. for about $34 million and spinning off the remainder of its businesses to shareholders.
The price of the merger excludes the assumption of about $7 million of Point.360’s outstanding debt, as well as DG FastChannel’s initial $5.3 million payment for shares of the provider of media management services. DC FastChannel provides digital media services to the advertising, broadcast and publishing industries.
“Due to the combination of Point.360’s spot distribution business and DGFC, our shareholders will hopefully benefit from the market's valuation of DGFC including the additional revenues and cost efficiencies that will accrue to the combined businesses,” President and CEO Haig S. Bagerdjian said in a statement before the opening bell.
Under the terms of the agreement, Point.360, will spin off its post-production operations to shareholders, and DG FastChannel will integrate the company’s advertising distribution operations.
The new company, which will be run by Point.360’s senior management, will be called New 360. DG FastChannel already owns 16% of Point.360’s stock but will not participate in the ownership of New 360.
The transaction is expected to be completed in the third quarter of 2007. Point.360’s shareholders will receive one share of New 360 for each Point.360 share held. Point.360 said it hopes to list shares of New 360 on the Nasdaq.
At 12:23 ET shares were up $1.48, or 40.00%, to $5.17. The previous 52-week high of $4.15 was set on Dec. 29, 2006. The 52-week low of $1.62 was set on Dec. 8, 2006.
