Acquisition & Appointment of NonExecutive Director
07 Avril 2010 - 8:00AM
UK Regulatory
TIDMBRST
RNS Number : 7914J
Burst Media Corporation
07 April 2010
7 April 2010
Burst Media Corporation ("Burst" or the "Company")
Acquisition of On The Phone Media Limited
and
Appointment of Board director
Burst is pleased to announce that it has acquired On The Phone Media Limited -
trading as OTP Media - ("OTP"), a leading premium advertising network in the UK
(the "Acquisition").
OTP was established in 2002 and has grown to become a leading advertising
network in the UK, with a particular focus on premium advertising. OTP's
publisher relationships cover verticals including parenting, automotive, sport,
food and entertainment. OTP's advertiser relationships include Marriott Hotels,
Mercedes, O2, Paramount and Pepsi.
Initial cash consideration of GBP1.575 million ($2.38 million) has been paid and
an aggregate of one million new Burst common shares (the "Initial Consideration
Shares")1 have been issued to the vendors of OTP. Further consideration of up to
GBP1.10 million ($1.66 million) in cash and the issue of up to two million new
Burst Shares (altogether the "Further Consideration") may become payable by
Burst to certain of the vendors of OTP who are remaining with OTP following
completion of the Acquisition. The Further Consideration becomes payable only
upon OTP achieving certain financial targets over the period from completion of
the Acquisition to 31 December 2011.
The maximum amount of the Further Consideration will become payable in the event
that OTP achieves revenues of GBP2.5 million and profit before tax of GBP0.205
million in the period from completion of the Acquisition to 31 December 2010,
and revenues of GBP4.035 million and profit before tax of GBP0.375 million for
the year ending 31 December 2011. If such targets are not achieved, the Further
Consideration shall be reduced in proportion. No Further Consideration shall
become payable if OTP achieves less than 75 per cent of these financial targets.
Burst has acquired OTP on a debt free basis and with appropriate levels of
working capital, including cash headroom. To the extent that such headroom
proves to be in excess of OTP's actual working capital requirements, a further
payment of up to GBP75,000 ($113,600) may become payable to the vendors of OTP
six months following completion of the Acquisition.
All of the new Burst common shares issued and to be issued in consideration for
the Acquisition are and will be subject to lock in and orderly marketing
provisions.
OTP has 11 employees and is based in London. OTPs managing director, Ian
Woolley, and commercial director, Simond ffiske, are both staying with the
enlarged Burst group following completion of the Acquisition.
In the year ended 31 March 2009, OTP recorded unaudited adjusted profit before
tax of GBP0.17 million on unaudited turnover of GBP2.7 million. As at 31 March
2009 OTP had unaudited total assets of GBP0.86 million.
Burst was the 16th largest ad network in the UK in February 2010, reaching
nearly 12.3 million unique viewers. (Source: comScore) The Burst Board believes
that the Acquisition will broaden Burst's international capabilities and
significantly strengthen its position in the UK market. Additionally, potential
revenue synergies have been identified whereby OTP will monetise certain of
Burst's existing advertising inventory in the UK. It is expected that the
Acquisition will be earnings enhancing during the current financial year ending
31 December 2010.
Tim Trotter, non-executive chairman of OTP, has been appointed to the board of
Burst as a non-executive director with immediate effect. Mr Trotter joined the
board of OTP in 2007 and has substantial experience in the UK marketing and
advertising sector. He is currently the non-executive Chairman of Vislink PLC,
non-executive Chairman of Flying Brands Limited, and non-executive Chairman of
Smithfield Consultants Limited. Further disclosures regarding Mr. Trotter are
given below.
Application will be made for the Initial Consideration Shares to be admitted to
trading on AIM. Following the admission to trading of the Initial Consideration
Shares, Burst will have 71,628,562 common shares in issue.
Jarvis Coffin, Chief Executive of Burst, commented:
"OTP Media shares our core value of championing online vertical content and the
web publishers that produce it. This acquisition adds to the value of what both
companies can bring to UK publishers and the resources they can put to work for
UK advertisers trying to reach engaged audiences online. OTP provides us with a
stronger presence in the strategically important UK market and resumes our
stated intention to expansion outside of the US."
Ian Woolley, Managing Director of OTP, commented:
"By joining forces with the industry's premier provider of services to vertical
content publishers, we now have access to their proven business processes and
technical resources, The acquisition of OTP by Burst helps us both to expand our
services and solutions that we provide publishers, and it will allow advertisers
to engage more closely with their target audiences."
Enquiries:
+------------------------------+------------------------------+
| Burst Media Corporation | |
+------------------------------+------------------------------+
| Jarvis Coffin, Chief | Tel: +1 781 852 5271 |
| Executive Officer | |
| Steve Hill, Chief Financial | |
| Officer | |
| | |
+------------------------------+------------------------------+
+------------------------------+------------------------------+
| Hudson Sandler | |
+------------------------------+------------------------------+
| Nick Lyon | Tel: +44 (0) 20 7796 4133 |
| | |
+------------------------------+------------------------------+
| Altium | |
+------------------------------+------------------------------+
| Tim Richardson / Paul | Tel: +44 (0) 20 7484 4040 |
| Chamberlain | |
+------------------------------+------------------------------+
Notes:
1. Based on the closing price of a Burst common share on 6 April 2010 of 7.75p
($0.12), as derived from Daily Official List of the London Stock Exchange, the
value of the Initial Consideration Shares was GBP77,500 ($117,400).
2.Exchange rate used throughout this announcement - GBP1 = $1.51.
3. Any statements in this press release about future expectations, plans, and
prospects for the Company, including statements about the estimated revenue of
the Company, and other statements containing the words "estimates", "believes",
"anticipates", "plans", "expects", "will", and similar expressions, constitute
forward-looking statements. Actual results may differ materially from those
indicated by such forward-looking statements as a result of various important
factors, including the unpredictable nature of our rapidly evolving market and
fluctuations in our business; the effects of competition; any adverse changes in
our customers' business, and other factors discussed in our latest annual report
and other filings. In addition, the forward-looking statements included in this
press release represent our views as of 1 April 2010. We anticipate that
subsequent events and developments may cause our views to change. However, while
we may elect to update these forward-looking statements at some point in the
future, we specifically disclaim any obligation to do so except insofar as may
be required of the Company by the AIM Rules. These forward-looking statements
should not be relied upon as representing our views as of any date subsequent to
1 April 2010.
Further information on Tim Trotter
Timothy Hugh Southcombe Trotter, 51, is currently a director of the following
companies:
Bell Design & Communications Limited
Bluefin Advisory Services Limited
Bluefin Group Limited
Flying Brands Limited
h2glenfern Limited
On The Phone Media Limited
Smithfield Consultants Limited
Smithfield Financial Limited
Trotter & Co. Limited
Vislink PLC
Mr Trotter has also been a director of the following companies over the past
five years:
Ashsale Limited
Big Green Door Limited
Fiveten Group Limited
Fiveten Group Finance Limited
Fiveten Group Holdings Limited
Green Issues Communications Holdings Limited
JACTaG Holdings Limited
Thinc Entities Limited
Thinc Group Limited
Thinc Group Holdings Limited
WH Marks Sattin (UK) Limited
Mr Trotter has confirmed that there are no other disclosures required in
accordance with Schedule Two para (g) of the AIM Rules in relation to his
appointment to the board of Burst.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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