Point.360 (NDAQ:PTSX) announced yesterday that it had entered a merger agreement with DG FastChannel, Inc. (NDAQ:DGFC). Under the terms of the agreement, DGFC will acquire Point.360's spot advertising distribution business, and Point.360 will spin off its remaining businesses to its shareholders. DGFC will also be assuming up to $7 million in Point.360's debt while providing it with $3 million in cash for the working capital of the other business.
As a result of the spin-off, Point.360 shareholders will continue to own shares in the New 360, which focuses on high definition and standard definition mastering, sophisticated computer graphics, data conversion and video, film and media asset management services. The existing Point.360 senior management will stay with the new company that will be basically debt free and generating revenues of about $45 million to $50 million with EBITDA around $4 million to $6 million during the next 12 months. This is great news for shareholders as they will not only receive a payment from DGFC, but also shares in a new spinoff - which tend to outperform the overall market in their first year. This makes PTSX a stock
worth watching!
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