In its growing quest to merge TV and online advertising initiatives, DG (known to some as DG Fastchannel) laid down $66 million in cash to steal rich media/video ad server Eyewonder away from Limelight Networks, which only acquired the ad tech firm at the end of 2009 (for $110 million in cash and stock). The acquisition gives DG a mighty trifecta of rich media/video advertising companies: EyeWonder, MediaMind (acquired in June) and Unicast (acquired in 2008). DG President and COO Neil Nguyen called the process of bringing together these three companies “strategically establishing an online media powerhouse.”
EyeWonder will become part of DG’s online division, which is led by Chief Digital Officer (and MediaMind General Manager) Gal Trifon. In addition, EyeWonder further bolsters DG’s international footprint, already given a big boost by the MediaMind acquisition, with the Germany-based CHORS unit, which provides real-time buying and targeting infrastructure.
While DG’s stock (DGIT) took a bath in the early August market selloff, investors should be pleased to hear that the EyeWonder acquisition is expected to be accretive to DG’s 2012 GAAP earnings per share. EyeWonder is expected to generate between $36 million and $37 million in revenue for full-year 2011, while DG is expecting to realize $7 million in cash synergies in the 12 months following the close of the deal, estimated to fall on Sept. 1.