The Orchard merging with DMGI

Digital music distributor and marketer The Orchard announced its pending merger with digital music and video content provider Digital Music Group Inc. DMGI will issue about 9.1 million common shares and 4.5 million shares of convertible preferred stock to The Orchard's shareholders, who would own 60 percent of the combined company. The deal is set to close in the fourth quarter. The post-merger business will operate under The Orchard brand while retaining DMGI's NASDAQ listing. Greg Scholl, Orchard president and CEO, will head the combined company, while current DMGI CEO Mitchell Koulouris will exit to pursue other interests. DMGI CFO Karen Davis will serve as interim CEO until the merger closes.

The company will control more than a million recordings and thousands of hours of television, film and video programming. The merger also will offer digital and mobile retailers, advertisers, consumer brands and technology companies a single point of access to digital content. The Orchard's distribution services include worldwide synchronization placement, co-marketing initiatives with consumer brands and global publishing administration, with operations in 25 countries. Its independent label clients feature imprints like Sanctuary, Smithsonian Folkways, Shanachie, Cleopatra, Norton and SST. DMGI's own distribution and licensing partnerships include Amerindie labels Kill Rock Stars, Ipecac and Barsuk in addition to artist catalogs from Johnny Cash and Ike & Tina Turner. DMGI also boasts video licenses including "I Spy" and "My Favorite Martian." Its partners include the iTunes Store, Google Video, YouTube, Verizon, Sprint, InfoSpace, Moderati and Zingy.

For more on the DMGI/Orchard deal:
- read this release

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