Digital Music Group Buys Digital Rights Agency For $3.2 Million Plus Stock

Digital music provider Digital Music Group, Inc. has acquired SF-based Digital Rights Agency LLC for $3.2 million and 420,000 shares of stock — valued at a toal of about $4.9 million total. The latter is a digital music distruibutor for over 350 indie labels in 14 countries. The deal includes a stock warrant for DRA founder Tuhin Roy, which stays on as president of DMGI’s new subsidiary, and a possible earn-out of up to $1.2 million and 87,000 shares for Tuhin and other former owners if targets are met by the end of 2007. Revenue for the six months ending June 30, 2006 was $3.2 million — up from $2.7 million for all of 2005 — with much of the increase stemming from “penetration of the mobile market.”