New York - The Orchard, a digital distributor and marketer of independent music, announced on Wednesday that it has agreed to a reverse merger agreement with fellow digital music and video distributor Digital Music Group, Inc.

Under the terms, DMGI will issue 9.1 million shares of common stock and 4.5 million shares of convertible preferred stock to The Orchard, whose shareholders will own about 60% of the merged entity.

The combined business will retain DMGI's Nasdaq listing and change its name to The Orchard, whose president and CEO Greg Scholl will lead the combined company.

Following completion of the deal, The Orchard will control over one million recordings and thousands of hours of film and video programming.

Last year, DMGI reported revenue of $10.2 million and $2.4 million in profit, while The Orchard had revenue of $14.9 million and $4.2 million in profit.

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http://www.dmgi.com

http://www.theorchard.com