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Focus Media paying $325M for rival
NEW YORK (MarketWatch) - China-based display advertising firm Focus Media on Saturday said it inked a deal to buy rival Target Media in a deal valued at $325 million in cash and stock.
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Focus Media (FMCN:
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Last: 37.00+1.00+2.78%
4:00pm 01/06/2006
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FinancialsMore FMCNFMCN37.00, +1.00, +2.8%) will pay $94 million in cash and $231 million in newly issued stock, with the deal expected to close in the first quarter.
Target Media, a challenger in the flat-panel display advertising market, had been expected to stage an initial public offering on the heels of Focus Media's IPO last July 13 at $17 a share.
Target Media's CEO David Yu will join Focus Media's board as co- chairman of Focus Media.
Private equity firm The Carlyle Group, which is the second-largest shareholder of Target Media, has OKd the deal, Focus Media said.
"By joining forces, these two leading players in out-of-home audiovisual advertising will immediately create the strongest platform in this high growth space in China," said Wayne Tsou, managing director of The Carlyle Group and head of Carlyle Asia Venture and Growth Capital. "Carlyle has been actively adding value to Target Media and will continue to extend its long- term support to the combined management by remaining as a significant shareholder of the merged entity."
After the merger closes, Focus Media will operate a nationwide commercial location advertising network of over 60,000 displays in more than 30,000 commercial locations in about 75 cities in China.
The deal comes three days after Focus Media completed its acquisition of Framedia.
Shares of Focus Media rose $1 to $37 on Friday.
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