Tom Engdahl is a rare bird in these parts, and he almost migrated to California.
The CEO of 8-week-old Video Networks Inc. is a veteran entrepreneur, with two successful start-ups on his resume. West Coast venture capitalists, who love backing a proven commodity, wanted to back VNI, but only if he relocated to his native California.
That didn't sit well with the locals here, not to mention Engdahl and his family, comfortably ensconced in Atlanta since 1983. So Engdahl and venture capitalist Stephen Fleming, with the help of several institutions, convinced the investors -- two prestigious West Coast venture funds -- through cajoling and cash that Atlanta could profitably house VNI.
Though his North Atlanta office has little furniture and personnel (the sign outside still reads "Commonwealth Insurance," the previous tenant), Engdahl has secured investments from Fleming's Atlanta-based Alliance Technology Ventures, as well as Institutional Venture Partners (IVP) and U.S. Venture Partners (USVP), both based in Palo Alto, Calif. Rosemont, Ill.-based Comdisco Inc., whose network VNI will use, also has an equity stake in the company. The total investment is worth about $4.3 million. VNI wants to transmit video digitally through an electronic infrastructure -- not a new idea, but one no one has successfully executed.
After Engdahl left Digital Video Inc. -- his second successful start-up -- in 1995, IVP general partner Geoff Yang offered him a slot as an "entrepreneur in residence" at IVP. Engdahl commuted between Atlanta and Palo Alto for a year, advising potential investors and researching his next opportunity.
11/14/2000 - Video Network, Inc. Closes $66 Million Financing Round,Announces Plans to Change Company Name to Pathfire
Key Strategic Investors Include Enron Broadband Services, Reuters and PanAmSat
New Pathfire Name Reflects Company’s Pioneering Applications for Distribution and Management of Digital Media Across Numerous Industries
ATLANTA, GEORGIA, and NEW YORK, NEW YORK, November 14, 2000
Video Networks Inc. (VNI), a leading business-to-business provider of digitized video and related e-commerce applications for the media industry, announced today that it has closed on a $66 million round of private financing led by Quadrangle Group LLC, a private equity firm specializing in the media and communications industries.
Quadrangle's $20 million investment was the cornerstone of a round of financing that also included several key strategic and financial investors, such as Enron Broadband Services, a subsidiary of Enron Corp. (NYSE: ENE); Halpern Denny & Company; PanAmSat (NASDAQ: SPOT); Reuters; Riggs Capital Partners; and Sand Hill Capital. VNI said that it expects to announce business partnerships with several of its new strategic investors in the near future.
This round of financing included participation by existing high-quality VNI investors, such as Alliance Technology Ventures, AT&T Ventures, Bank of America Capital Investors, Institutional Venture Partners (IVP), Kinetic Ventures, Monarch Capital Partners, Noro-Moseley Partners, UPS Strategic Enterprise Fund and U.S. Venture Partners. Robertson Stephens functioned as VNI's agent for this significant round of financing.
Michael J. Eckert, president and CEO of VNI, said, "We are pleased and gratified that such a large number of blue-chip companies and firms have joined our existing investors in supporting VNI's vision and direction, and we are quite enthusiastic about the significant strategic value they bring. Our ability to secure a lead investor of Quadrangle's stature represents a strong vote of confidence in our employees, and of course in our groundbreaking technology. Through its deep relationships and high regard within the media and communication industries, Quadrangle will be a valuable partner as we continue to build this company."
Joshua L. Steiner, managing principal of Quadrangle, said, "We believe that VNI offers its customers superior service and significant cost-savings. The fact that leading media companies like NBC and Charter Communications rely on VNI for mission-critical solutions gives us great confidence in the company's prospects."
Steven Rattner, managing principal of Quadrangle, said, "Quadrangle's strategy is to focus on high-quality investments in the media and communications industries, and to invest in companies where we can make a difference. We are very excited about this company and its management team, and we look forward to helping VNI increase its product offerings and expand its customer base."
Quadrangle will receive one seat on the VNI Board of Directors and has the right to nominate a second board member, subject to the approval of the other shareholders in this round of financing.
VNI is a leading business-to-business provider of digital media content distribution and management services to the broadcasting and cable industries, with emerging operations in the areas of radio, digital cinema, syndication and streaming content on the Internet. VNI provides a distribution platform and software applications for the delivery and management of digitized video content and has developed unique e-commerce solutions that improve the efficiency of related billing and processing transactions. VNI's customers include major broadcast networks, cable companies, advertising agencies and other leading media companies.
Company to Change Name to "Pathfire," Reflecting Its Continuing Evolution
VNI's decision to change its name to Pathfire reflects a new stage of its development and its unique ability to distribute and manage digital media across numerous segments of the media industry.
The name is meant to evoke the speed and efficiency the company's leading-edge software applications and related networking capabilities bring to the management and exchange of digitized media assets in the cable, broadcast, media and entertainment industries. The company will officially adopt the Pathfire name and will launch an extensive rebranding campaign during the first quarter of 2001.
"We wanted a name that evoked the things we do as a company as well as the unique and dynamic way in which we do them," Eckert said. "Pathfire speaks to our ability to distribute content and also to our ability to surround that content with applications and services that make it more valuable."
Quadrangle Group LLC is an investment firm specializing in the media and communications industries. It was founded in March 2000 by four Managing Directors of Lazard Frères & Co. LLC who have more than 50 years of combined experience in private equity and in media and communications. The firm's advisory board and other investors include many prominent executives of leading media and communications companies.
DG FastChannel™ Completes Acquisition of Pathfire, Inc.
- Acquisition Further Diversifies DG FastChannel’s Client Base and Revenues -
- Combined Entity to Realize Operational Synergies -
June 05, 2007 07:00 AM Eastern Daylight Time
DALLAS--(BUSINESS WIRE)--DG FastChannel, Inc. (NASDAQ: DGIT), the leading provider of digital media services to the advertising and broadcast industries, announced today that it has completed its previously announced acquisition of privately-held Pathfire, Inc., for $30 million. DG FastChannel financed the transaction with cash on hand and through borrowings under its existing credit facility.
Pathfire distributes third-party long-form content, primarily news and syndicated programming, through a proprietary server-based network via satellite and Internet channels. Pathfire is the primary distribution method for the majority of syndicated programming, including shows such as “Jeopardy,” “Friends,” and “Wheel of Fortune.” In addition, ABC and CNN rely on the Pathfire network to distribute thousands of news stories to hundreds of television affiliates throughout the United States. Pathfire technology is installed in approximately 1,400 U.S. television stations.
Pathfire’s digital media platform supports a suite of applications tailored to the needs of news, syndication, video news feeds and broadcasters. Pathfire software applications reside on over 10,000 desktops in virtually every U.S. television station. Like DG FastChannel, Pathfire delivers integrated digital solutions that automate media distribution and workflow management solutions enabling both content providers and broadcasters to maximize efficiency while reducing costs. The combined DG FastChannel and Pathfire networks provide a one-stop source for all video forms including ads, news, syndicated programming, movies and video news releases and electronic press kits. Scott K. Ginsburg, Chairman and CEO of DG FastChannel, and Omar Choucair, Chief Financial Officer of DG FastChannel will lead the combined operations.
About DG FastChannel, Inc.
DG FastChannel delivers the standard in digital media services to the advertising, broadcast and publishing industries. DG FastChannel’s innovative technology solutions help advertisers and agencies work faster, smarter and more competitively.
Offering both the ubiquitous reach of multicast satellite transmissions and the targeted capabilities of Internet technologies, DG FastChannel has deployed a suite of business intelligence and asset management tools and creative and production resources designed specifically for the advertising community. DG FastChannel’s next generation distribution platform includes high definition electronic video distribution capabilities that streamline the advertising process from point of ingest via digital distribution to its edge-servers located at TV, cable and network broadcasters. DG FastChannel’s online media distribution network and suite of products and services are relied upon by more than 5,000 advertisers and agencies, and over 21,000 online radio, television, cable, network and print publishing destinations. DG FastChannel recently agreed to acquire the advertising distribution operations of Point.360 (NASDAQ: PTSX) with the transaction expected to be completed during the third quarter of 2007. For more information visit www.dgfastchannel.com.
About Pathfire (www.pathfire.com)
Pathfire, headquartered in Atlanta, is the leading provider of digital content distribution and management solutions for the broadcast, media and entertainment industries, supplying innovative digital solutions, from distribution to air, for broadcasters, news organizations, television networks, Hollywood studios and other media companies. Pathfire's Digital Media Gateway™ (DMG) is an advanced digital IP store-and-forward platform, delivering news stories, syndicated programming, advertising spots, and video news releases to more than 1,400 broadcasters. Pathfire DMG and the associated workflow tools are available on over 10,000 PC desktops throughout the world.