AirMedia Group buys airport gate advertising firms

Beijing-based AirMedia Group Inc., which runs digital TV screens in airports, said Monday it will expand its advertising business to gate bridges in airports through two strategic acquisitions.

AirMedia has agreed to acquire Excel Lead International Ltd. for up to $27.7 million in cash and about 765,475 American Depositary Shares, or up to $40.3 million in cash only. The final purchase price is contingent on Excel's profit in the second half of 2008, and the full years of 2009 and 2010.

Additionally, an affiliate of AirMedia agreed to buy an 80 percent stake in Flying Dragon Media Advertising Co. for about $1.5 million in cash.

Through the transactions, AirMedia will obtain the contractual rights to place advertisements on gate bridges located in 10 major airports in mainland China. Gate bridges connect the boarding gates to the airplanes.

The acquisition of Excel is expected to close in July, subject to customary closing conditions. Both deals are expected to add to AirMedia's adjusted earnings starting in 2008.