TheNewsMarket, a video distribution services provider, has signed an agreement to acquire all of the outstanding shares of media strategist Medialink, the companies announced. Under the terms of the deal, TheNewsMarket will buy all of Medialink’s outstanding common stock at a price of $0.20 per share in cash, which amounts to roughly $1.4 million, plus the assumption of liabilities, said TheNewsMarket’s CEO and President Jim Lonergan. Medialink also said it had $17.95 million in revenues for the year that ended in March. Medialink’s shareholders will meet next month to decide on the offer, as the board has already approved the deal.
In a statement, Medialink CEO Laurence Moskowitz said the deal offers the company greater protection against the challenges in the “media communications industry in general and Medialink’s own ongoing financial challenges.” For TheNewsMarket, Lonergan said that the merger will help the company expand its video offerings from being primarily associated with distribution for PR and marketing companies, to being able to create, produce and track videos as well. Release
I spoke with both Lonergan and Shoba Purushothaman, the company’s chairman and co-founder, about the timing of merger and how the two plan to work together. They said the tie-up had been “kicking around” for about a year. But with the confluence of an ever more difficult market and the growth of online video by PR companies and marketers, they felt the time — and the price of the deal — were right. “A lot of companies are just starting to dip their toe into the video space and so they want some hand-holding,” said Purushothaman. “This agreement allows us to offer more services as PR firms are looking for a new way of doing things.”
After the merger’s approval, Lonergan said he expected to create a new corporate entity to serve as an umbrella over the two units. However, he added that Medialink — which is not to be confused with the media rep and strategy firm Media Link LLC, which is headed by Michael Kassan and Wenda Harris Millard — will be rebranded after the shareholders meeting next month.