Deal News: An agreement has been made by VisionChina Media (VCM) to acquire all of the shares in Digital Media Group (DMG), via a merger in exchange for cash and stock totaling US$160m. This deal represents one of the largest acquisitions involving a venture-backed China-based private company by a public company.

The merged company will combine VCM’s outdoor digital network and DMG’s national subway TV network, to create the largest mobile television advertising network in China. VCM is listed on the NASDAQ and the merger is expected to create strong shareholder value in the near term. “The combined company’s fully integrated advertising network will deliver real-time television programming to passengers during their commutes…” said Li Limin, the chairman and CEO of VCM.

Simpson Thacher acted for VisionChina Media on its NASDAQ IPO in early 2008, and lead partner Chris Lin advised on the acquisition of DMG. Orrick partner and member of the firm’s emerging companies group David Lee (pictured) led the team for DMG, which was comprised of lawyers from the Silicon Valley, San Francisco, Shanghai and Hong Kong.

“This transaction exemplifies the emerging strength of the Chinese technology economy, [and] it also highlights a growing consolidation in the Chinese media sector,” said Lee. “In the past, our experience is that Chinese venture-backed startups have tended to exit via a NASDAQ listing, but this particular deal shows that a significant M&A exit can be achieved – and is a viable option for venture-backed startups in China.”

Related Stories:

• Orrick and Freshfields help telcos on US$1.3bn share buyback
• China Development Bank sets sail for Greece
• Another major H-share IPO for Baker & McKenzie, Morrison & Foerster