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Encompass Digital Media to Acquire Content Distribution Business from Ascent Media Corporation

Monday, December 13, 2010   (0 Comments)
Posted by: Orly Konig-Lopez
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LOS ANGELES – December 3, 2010 – Encompass Digital Media, Inc., a U.S. based digital media services provider, today announced a definitive agreement to acquire the global content distribution business of Ascent Media Corporation (NASDAQ: ASCMA) for total consideration of approximately $120 million, including approximately $113 million in cash and the assumption of certain indebtedness and obligations totaling approximately $7 million.  The acquisition will create a leading global provider of mission-critical outsourced media services to broadcasters, cable channels, media companies, major corporations and institutions.

The transaction will greatly expand Encompass’ scale and geographic footprint by combining Encompass’ core operations in Los Angeles and Atlanta with Ascent’s broadcast facilities in the U.S. (including the New York metro area, Minnesota and Burbank), Singapore and London.  In addition to providing international and U.S. clients with best-in-class network origination and transmission services, the transaction enables Encompass to provide unparalleled 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.

"Acquiring Ascent’s content distribution business positions Encompass as a leading provider in outsourced media solutions by significantly enhancing our ability to meet the needs of broadcasters and media companies looking to benefit from the latest technology and rationalize costs with a highly credible global partner,” said Simon Bax, Chief Executive Officer of Encompass. 

"Encompass continues to execute its strategic plan superbly and has created a world class provider of outsourced broadcasting services,” said Ellis Jones, Chief Executive Officer of Wasserstein & Co. and Chairman of Encompass.

"Encompass will be unique in our ability to provide such a broad range and scope of mission-critical services with the high level of performance and technical expertise on which our clients rely,” said Bill Tillson, President and Chief Operating Officer of Encompass. "We greatly respect the talented team at Ascent’s content distribution business and expect them to play an important role as we seek to capture the significant opportunities that exist in today’s market, while remaining consistently focused on performance.”  

Following the completion of the transaction, Encompass will have approximately 950 employees and will operate a network of broadcast facilities worldwide with integrated media solutions that include: network origination, centralcasting for TV stations, disaster recovery, satellite and fiber transmissions, satellite uplink trucks and digital media services.

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, U.S. 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.
Financing for the transaction is being provided by Macquarie Capital and Tennenbaum Capital Partners, LLC.  Macquarie Capital is serving as the exclusive financial advisor to the Company.  Tennenbaum Capital is a current lender to and shareholder of Encompass and will continue to participate in both capacities.  Munger, Tolles & Olson LLP served as primary legal advisor.  The transaction is subject to customary closing conditions, including approval by Ascent shareholders, regulatory clearances, and the transfer of certain FCC licenses.  Subject to fulfillment of these conditions, the transaction is expected to close in the first quarter of 2011.

Encompass (formerly named Broadcast Facilities, Inc.) was formed in 2008 by Simon Bax, Bill Tillson and Wasserstein & Co., a leading independent private equity and investment firm, to acquire and operate broadcast media facilities in the U.S., Asia and Europe.  Since that time, the Company has significantly expanded its original business model and geographic footprint through its acquisition of Andrita Media Center in April 2008, and the Satellite Services Division of Crawford Communications, Inc. in January of 2010.  Wasserstein & Co., which is focused primarily on leveraged buyout investments and related investment activities, will remain the majority owner of Encompass. 

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