CORRECTED - CORRECTED-UPDATE 1-Ascent Media to sell unit for $113 mln

Fri Dec 3, 2010 4:40pm EST

(Corrects headline and paragraph 1 to show that the deal value was $113 million, not $133 million)

* Says Encompass will assume $7 mln in debt

* Pursuing strategic alternatives for AMG's sys business

* Shares up 10 pct in morning trade

Dec 3 (Reuters) - Ascent Media Corp (ASCMA.O) said it would sell its content distribution business of its Ascent Media Group (AMG) unit to Encompass Digital Media Inc for about $113 million, sending its shares up 10 percent in morning trade.

Encompass will assume debt totaling about $7 million.

AMG's content distribution business provides outsourced network origination services to satellite, cable and pay-per-view programming networks through facilities located in the United States., the U.K. and Singapore, the company said.

This deal follows Ascent Media's sale of AMG's Creative Services and Media Services businesses to Deluxe Entertainment Services Group Inc for $68 million, on Nov. 24.

Post both these sales, the company said it would have sold a substantial majority of AMG's operating businesses.

Ascent media will continue to pursue strategic alternatives for AMG's systems integration business, the company said.

The transaction is expected to close in the first quarter of 2011.

Shares of the Englewood, Colorado-based company, which have gained 9 percent since it posted third quarter results on Aug. 9, were up 9.58 percent at $33.98 on Friday on Nasdaq. (Reporting by Siddharth Cavale in Bangalore;Editing by Prem Udayabhanu)

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