S&P Global Market Intelligence provides a wrap-up of U.S. companies' media and communications deal announcements and completions from May 7 to May 11.
* Cisco Systems Inc. closed its acquisition of California business intelligence startup Accompany for $270 million in cash and assumed equity awards. Accompany founder and CEO Amy Chang will lead Cisco's collaboration technology group as senior vice president.
* Gannett Co Inc. agreed to buy WordStream Inc., a provider of cloud-based software-as-a-service solutions, to help with digital marketing campaigns. The transaction builds upon Gannett's existing data-driven digital marketing services, ReachLocal and SweetIQ. The purchase price is $130 million in cash, net of cash acquired, plus up to a payable earn out of $20 million in 2019 and 2020 based on achieving certain revenue targets, the company said May 10. WordStream is expected to contribute about $55 million in digital marketing services revenue and about $16 million of adjusted EBITDA in the first year. The deal will be accretive in the first full year of operations and funded from borrowings under the company's revolver. The acquisition is expected to close in the second quarter after the expiration or earlier termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfaction of other customary closing conditions.
* Alphabet Inc. unit Google Inc. has agreed to buy Israel-based enterprise cloud migration startup Velostrata, the search giant said in a May 9 blog post. The proposed acquisition is expected to help add capacities that support a transition to Google Cloud and aids Google’s strategy to expand its cloud computing business. Velostrata, formed in 2014, reportedly raised funds up to $31.5 million and owns patented solutions that assist enterprises to make cloud transitions.
* Fusion Telecommunications International Inc. struck a deal to buy privately held MegaPath Holding Corp. for $71.5 million. Based in Pleasanton, Calif., MegaPath provides various cloud services. The transaction is valued at under 5.0x pro forma adjusted EBITDA, including anticipated cost synergies realized within 12 months of closing, the company said May 10. Up to $10.0 million of the consideration is payable at Fusion's election in unregistered shares of Fusion common stock priced at $5.78 per share. The company intends to fund the cash portion of the consideration via borrowings under its first-lien senior secured credit facility, $62.0 million of which is currently held in escrow for the acquisition. The transaction is expected to close within the next 90 days, subject to receipt of certain regulatory approvals and other customary closing conditions.
* Keeping with its strategy toward becoming a more news- and sports-centric entity, 21st Century Fox Inc. has reached an agreement with Sinclair Broadcast Group Inc. and Tribune Media Co. to purchase seven TV stations in key markets. The $910 million deal would lift Fox Television Stations' coverage to nearly half of all U.S. households and give it a presence in 19 of the top 20 designated market areas. The transaction, which is expected to close in the second half of the year, would help facilitate federal approval of Sinclair's pending $4.6 billion purchase of Tribune.
Similarly, Sinclair has also reached deals with Standard Media Group LLC, Meredith Corp., Howard Stirk and Cunningham Broadcasting Corp., to sell certain television stations to win Tribune deal approval. These are the stations Fox is acquiring: KCPQ-TV, Seattle; WSFL-TV, Miami; KDVR-TV, Denver; WJW-TV, Cleveland; KSWB-TV, San Diego; KSTU-TV, Salt Lake City; and KTXL-TV, Sacramento, Calif. Four of the stations are located in markets home to NFL teams. With its recently signed five-year deal for "Thursday Night Football," plus its National Football Conference Sunday package, FOX Sports is now the top rights owner when it comes to pro football.
* Hammer Fiber Optics Holdings Corp. d/b/a Hammer Communications LLC signed a letter of intent to buy the stock of 1stpoint Communications LLC. and its subsidiaries, including Open Data Centers LLC and Endstream Communications LLC. 1stPoint is a local exchange carrier operating nationwide with intellectual property in services such as SMS/texting, collaboration tools and carrier switching. Endstream Communications offers wholesale voice services worldwide. Open Data Centers operates a carrier-neutral colocation facility in Piscataway, N.J., and will provide the brick-and-mortar capacity to help Hammer expand its services. The details of the transactions and closing dates have not been publicly disclosed. Hammer Communications operates a fixed wireless network over its own proprietary wireless technology that utilizes DOCSIS 3.0 & DOCSIS 3.1 protocols.
