| NEW YORK
NEW YORK Dec 5 Cross-media video advertising
startup Extreme Reach Inc will launch December 9 $495 million in
debt financing to fund its purchase of Digital Generation Inc's
television ad delivery business, sources told Thomson
JP Morgan and SunTrust have committed to arrange the debt
financing. The acquisition loan will launch at a 2 p.m. bank
meeting in New York.
The transaction is split between a $30 million first-lien
revolver due December 2018, a $350 million first-lien term loan
B due December 2019, and a $115 million, second-lien term loan
due December 2020.
Extreme Reach is buying DG's TV business, including its
advertising distribution business unit, for $485 million in
Indicative pricing on the first-lien term loan B is
LIB+500-525, with a 1 percent Libor floor. The loan is offered
at an original issue discount of 99 with 101 soft call
protection. The second-lien term loan is guided at LIB+900-925,
with a 1 percent Libor floor. The loan is expected to be issued
at a 98.5 discount. The loan will be non-callable in year one,
then callable at 102 and 101.
Existing cash, the new debt financing, and new equity from
Extreme Reach investors will fund the acquisition.
Spectrum Equity, which invested $51 million in Extreme Reach
in May, will invest an additional amount up to $47 million.
DG will use proceeds of the acquisition to pay off all of
its outstanding debt and to fund the majority of a planned $3
per share cash distribution to DG stockholders.
Extreme Reach and DG did not return calls for comment. JP
Morgan declined to comment.
Needham, Mass.-based Extreme Reach is a provider of
cross-media video advertising that span TV, online, mobile and
all other video media.