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Jumptap to be acquired by Millennial Media

GREENWOOD VILLAGE, Colo. (AP) -- Jumptap Inc. has agreed to be acquired by another mobile advertising company Millennial Media Inc. in an all-stock deal.

Jumptap, based in Boston, helps companies target, place and track advertising on mobile phones and tablets. The deal with Millennial Media, based in Baltimore, is expected to increase the clout of both companies in the fast-growing mobile advertising market.

Investment firm Keating Capital, a stakeholder in Jumptap, announced the deal on Thursday.

Keating, which invested $5 million in Jumptap's convertible preferred stock in June, said that it will receive $8.75 million worth of Millennial Media's common stock as part of the deal.

However, as part of the deal, about 10 percent of the shares will be held in escrow for a one-year period following the closing. Greenwood, Colo.-based Keating also faces several periods that restrict when the stock can be sold following the deal.

Jumptap stockholders will receive shares of Millennial Media common stock representing about 22.5 percent of the ownership after the deal is done, valuing the transaction at approximately $225 million.

The deal is expected to be complete in the fourth quarter of 2013. It still requires approval by Millennial Media's stockholders and certain regulatory approvals.

Keating Capital shares increased 4 cents to close at $6.29 but fell by the same amount in after-hours trading. Millennial Media shares fell 25 cents to close regular trading at $6.65 but added 3 cents in after-hours trading.