US-based digital media services provider Encompass Digital Media is to acquire the global content distribution business of Ascent Media Corporation for some $120 million, including approximately $113 million in cash and the assumption of certain indebtedness and obligations totalling approximately $7 million. The deal creates a major global provider of mission-critical outsourced media services to broadcasters, cable channels, media companies, major corporations and institutions.
The transaction will significantly expand Encompass’s scale and geographic footprint by combining its core operations in Los Angeles and Atlanta with Ascent’s broadcast facilities in the US (including the New York metro area, Minnesota and Burbank), Singapore and London. It will also enable Encompass to provide additional disaster recovery, occasional-use transmission and backhaul for news, sports and government services. Encompass will also expand its Los Angeles digital media manipulation, archive and distribution services to support existing and emerging applications and platforms worldwide.
Simon Bax, Chief Executive Officer of Encompass,, said the deal enhanced the company’s ability to meet the needs of broadcasters and media companies looking to benefit from the latest technology and rationalise costs.
The combined company will benefit from a high quality and diversified client base consisting of major media companies, cable and sports networks as well as government entities, including A&E Networks/Lifetime, Sony, NBCU, CBS, Disney/ABC, BBC Worldwide, US Department of Defense, MTV, ESPN, NHL, Discovery Networks, DIRECTV Sports Networks, NFL Network, YES Network, Scripps, Hallmark, Channel Five and TV Guide. Ascent’s video switch business will also allow Encompass to expand its relationships with key customers such as CNN, CNBC, Bloomberg, Thomson Reuters and the United Nations.
The transaction is subject to customary closing conditions, including approval by Ascent shareholders, regulatory clearances, and the transfer of certain FCC licences. Subject to fulfilment of these conditions, the transaction is expected to close in the first quarter of 2011.