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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): OCTOBER 16, 1996
DIGITAL GENERATION SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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CALIFORNIA 0-27644 94-3140772
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
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875 BATTERY STREET
SAN FRANCISCO, CALIFORNIA 94111
(ADDRESS, INCLUDING ZIP CODE, OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(415) 276-6600
NOT APPLICABLE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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Item 5. Other Events
In a press release disseminated on October 16, 1996, the registrant
announced that it had signed a definitive agreement for the acquisition of 100%
of the stock of PDR Productions, Inc., a New York-based media duplication and
distribution company. A copy of the press release is attached hereto as an
exhibit and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits
A copy of the Registrant's press release dated October 16, 1996,
announcing its agreement to acquire 100% of the stock of PDR Productions, Inc.
is attached hereto as an exhibit and is incorporated herein by reference.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Digital Generation Systems, Inc.
By: /s/Thomas P. Shanahan
Title: Vice President & Chief Financial Officer
Date: October 31, 1996
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Exhibit 99.1
DGS TO ACQUIRE PDR PRODUCTIONS
For more information:
Thomas Associates 415-596-2700
Robert Schettino
[email protected]
Jeff Byrne
[email protected]
Tom Shanahan
[email protected]
DG Systems 415-276-6600
DG SYSTEMS TO ACQUIRE PDR PRODUCTIONS
Affiliation with leading media duplicating company provides DG Systems with
greater presence, stronger operational capabilities in New York City
San Francisco - October 16, 1996 - DG Systems today announced the signing of a
binding, definitive agreement for the acquisition of 100% of the stock of PDR
Productions, a leading, New York-based, media duplication and distribution
company, in an $8.5 million cash and stock transaction. PDR Productions will
continue to operate as a wholly owned subsidiary of DG Systems.
Under the agreement, DG Systems will purchase 100% of the stock of PDR in
exchange for $6.0 million in cash and up to 300,000 shares of DG common stock.
During the first year, DG Systems may re-purchase the stock for $2.5 million, or
alternatively, make an additional cash payment at the end of one year equal to
the difference between $2.5 million and the stock's then current market value.
In 1995, PDR operated profitably with revenues in excess of $7.5 million. PDR
customers include prominent New York City advertising agencies, cable networks
and syndicators.
Pat DeRosa, PDR's sole shareholder, will remain a consultant of PDR following
completion of the transaction. "By combining forces with DG Systems, PDR will
have the opportunity to expand our operations and provide our customers with a
greater range of services in the years ahead," Mr. DeRosa commented.
"We believe that the combination with DG Systems allows us to expand the scope
of services we deliver to our valued clients," stated Neil and Joseph DeRosa,
vice presidents of PDR, who will continue with the PDR management team. "We look
forward to bringing the benefits of electronic video and audio deliveries to our
long-established customer base."
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"This acquisition gives DG Systems greater access to a number of the world's
leading advertisers, agencies, and syndicators, and at the same time strengthens
our operational and customer service capabilities in the New York City
metropolitan area," commented Henry Donaldson, president and CEO of DG Systems.
"We are excited to welcome PDR customers and employees to the DG Systems
family."
Founded in 1991, DG Systems is a leading provider of electronic distribution
services to the broadcast industry, linking hundreds of advertisers, agencies,
music companies, and syndicators with over 5,000 radio and television stations
in the United States. DG Systems offers an array of services for quick and
reliable delivery of superior-quality advertisements, new music singles, and
short-form programming to radio and television stations, along with associated
traffic instructions and supporting promotional material. More than 340
television stations and 10 cable interconnects have agreed to install the
company's video receiving equipment and receive video spot advertising over the
DG Systems network. DG Systems is headquartered in San Francisco, with field
offices in New York, Chicago, Los Angeles and Washington D.C. DG Systems can be
reached at 415-276-6600 or www.dgsystems.com on the World Wide Web.
This release contains forward-looking statements relating to the company, its
planned acquisition of PDR, and the expansion of its digital audio and video
networks. These forward-looking statements involve risks and uncertainties,
which could cause actual results to differ materially from those projected.
These and other risks relating to DG Systems' business are set forth in the
company's Form 10-Q filed with the Securities and Exchange Commission on August
6, 1996.
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