By Lisa Kerner
Charlotte, N.C., May 17 - WPP Group plc entered into a definitive agreement to acquire 24/7 Real Media Inc. in an $11.75-per-share tender offer slated to begin within 10 business days.
The transaction is expected to be completed by the end of July.
Total cash consideration payable to 24/7 shareholders is expected to be $637 million, financed with cash from existing resources and debt facilities.
WPP believes the acquisition of 24/7 will enhance the company's digital marketing and online media capabilities as well as expand WPP's reach in the South Korean, Australian and Japanese markets.
"This transaction will greatly strengthen our product offerings and will be highly beneficial to clients of both companies," 24/7 chairman and chief executive officer David J. Moore said in a company news release.
"24/7 Real Media will remain the largest, publisher-focused technology company in the sector, with the second largest installed base of ad serving technology clients globally, and working as part of WPP will be a tremendous benefit to our ad serving and Global Web Alliance clients."
WPP expects the transaction to be marginally dilutive to earnings in 2007 and 2008, with cost savings of $5 million expected.
24/7 will operate as part of WPP Digital under 24/7's current leadership, which includes Moore, chief financial officer Jonathan Hsu and chief technology officer Oleg Vishnepolsky. The digital marketing company is based in New York, with an additional 20 offices in 12 countries.
WPP is a communications services group based in London.
| Acquirer: | WPP Group plc
|
| Target: | 24/7 Real Media Inc.
|
| Transaction value: | $637 million
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| Price per share: | $11.75
|
| Announcement date: | May 17
|
| Expected closing: | End of July 2007
|
| Stock price for target: | Nasdaq: TFSM: $11.26 on May 16
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