Onstream Media, an online service provider of live and on-demand Internet video, has signed a definitive merger agreement to acquire Narrowstep, a provider of Internet TV and IPTV
services.
As per the transaction agreement, the shareholders of Narrowstep will receive 11.1 million shares of Onstream Media common stock. In addition, shareholders also have the opportunity to earn up to an additional 8.9 million Onstream Media shares subject to Narrowstep’s business achieving substantial revenue growth targets during the 18 months following the acquisition.
The combination of Narrowstep’s automated IPTV (
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Alert) platform, Telvos, and Onstream's Digital Media Services Platform (DMSP) is expected to result in a single comprehensive platform with an ability to acquire, store, manage, process, protect, monetize and deliver, digital broadcast quality video to TV's, computers, iPods, mobile phones, and more.
Randy Selman, president and CEO at Onstream Media, said, “We believe that the combination of Narrowstep's automated IPTV platform and Onstream’s capabilities in meta-tagging, optimization, indexing and classification will solidify our leadership position within the industry.”
“This will make Onstream even more attractive to a wide- range of potential partners, including telecom, satellite and cable companies, and hardware vendors.”
Selman believes that this acquisition will not only expand his company’s already deep technological offering, but will also enable it to sell its products through a established sales group in Europe along with the added capability to cross-sell Narrowstep's products and services through the existing sales channels domestically.
He also expects that this combination will not only significantly improve company’s competitive position but will also result in a strengthened cash position, revenue growth and opportunities to expand overall margins.
David C. McCourt, chairman and interim CEO at Narrowstep, stated, “The synergies that we expect to be realized between Narrowstep’s best-of-breed technology and Onstream's product set and thousands of corporate customers is expected to create a complete Internet-media solution and winning combination for customers, employees and shareholders of both companies.”
Narrowstep's proprietary technology provides the functionality to recreate the television-like experience either on the desktop computer screen or through the home television, and also the ability to integrate with the new set top boxes and other IPTV technologies, such as those developed by the CableLabs (
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Alert) industry consortium.
Also, Narrowstep offers its customers the expertise and technology to move, manage and monetize video content across the Internet.
Both companies have agreed to immediately execute a restructuring plan designed to significantly reduce or eliminate substantial costs related to Narrowstep's facility leases, SG&A expenses, public company and headquarters costs, and other professional fees and services.
The acquisition is expected to close in approximately 90-120 days, subject to shareholder approval.
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