Digitas Inc. and Modem Media Inc. have signed a merger agreement under which Boston-based Digitas will acquire Modem Media, Norwalk, CT, in a stock-for-stock transaction.
Under the terms of the agreement, at the closing date each outstanding share of Modem Media common stock will be exchanged for .70 shares of Digitas common stock, and each option outstanding or warrant exercisable into Modem Media common stock will be assumed by Digitas and become exercisable into Digitas common stock, with appropriate adjustments based on the merger exchange ratio.
Based on the July 14 closing price for Digitas common stock, the acquisition is valued at approximately $200 million on a fully diluted basis. Digitas expects the transaction to be accretive to earnings in the first full calendar year after closing.
The transaction, which is subject to customary closing conditions, including regulatory approval and approval of the stockholders of both companies, is currently expected to close in the fourth quarter.
Modem Media is an interactive marketing strategy and services firm. Digitas designs, builds and runs marketing engines intended to drive customer acquisition, cross-sell, loyalty, affinity, and care operations for marketers.
Following the merger, Modem Media will continue to operate under its existing name, and will be led by Martin Reidy, who currently is president of Digitas San Francisco. The Modem Media agency offices will be led by their current managing directors.
The companies expect to merge the Digitas San Francisco and London offices into the Modem Media agency offices in those locations. In addition, one Modem Media board member will join Digitas’ board of directors following the close of the transaction.
Network
