Tuesday, September 12, 2006

RealNetworks agrees to buy WiderThan for $350 mln - MarketWatch

RealNetworks aid late Tuesday it has agreed to buy South Korea-based mobile music and entertainment provider WiderThan Cofor $17.05 a share, or roughly $350 million. The offer represents a 20% premium on WiderThan's closing share price on Tuesday of $13.97.

Key Metrics:

2.69x acq value / 06 rev multiple
2.25x acq value / 07 rev multiple

Notes: Both companies have a heritage of innovation that has enabled popular consumer services including music, casual games and video services. This acquisition is complementary to RealNetworks' strategy of providing end-to-end digital media solutions to partners such as Cingular, Comcast, Sprint and Telmex. The companies' geographic footprints are complementary, with both companies enjoying market penetration in North America, while RealNetworks is strong in Europe, and WiderThan in Asia. This acquisition also provides RealNetworks with technology and customer relationships to extend its market-leading music subscription service into the rapidly growing mobile music space. RealNetworks expects the acquisition to be accretive in 2007 excluding acquisition-related charges (1). RealNetworks intends to keep the WiderThan brand intact and operate the business as a wholly owned subsidiary and intends to maintain its existing employee base.

Source: Yahoo Estimates
WTHN in blue
RNWK in red

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