ResponzeTV PLC
Acquisition of Reliant International Media LLC and Board Changes
ResponzeTV PLC (the `Company'), which was admitted to trading on AIM on 29
December 2006, announces that it has acquired the entire issued and outstanding
share capital of Reliant International Media LLC (`Reliant'), a Florida, USA
based TV home shopping company (the `Acquisition'). The consideration will be
the issue to the vendors of Reliant (the `Vendors') of an aggregate maximum of
44,576,349 new ordinary shares of 16p each in the Company (`Consideration
Shares'), representing 45% of the issued share capital of the Company as
enlarged by such issue.
Completion of the Acquisition took place on 11 January 2007. On completion the
Company issued to the Vendors 13,620,551 Consideration Shares, representing 20%
of the issued share capital of the Company as enlarged by such issue. The
Company will issue a further 4,540,184 Consideration Shares to the Vendors by 31
August 2007, representing a further 5% of the issued share capital of the
Company as enlarged by such issues. The issue of the balance of 26,415,614
Consideration Shares (being a further 20% of the issued share capital of the
Company as enlarged by all such issues) will be by way of earn-out and is
dependant on the financial performance of Reliant for the financial years ending
31 December 2007 (`FY 2007') and 31 December 2008 (`FY 2008').
Reliant is an existing customer of the Company's international supply business
and the two businesses have worked together on a number of joint projects during
2006. The directors of the Company believe the Acquisition will complement the
existing international supply business of the Company, which sources wholesale
products for sale to TV direct response (`DRTV') and TV home shopping operators,
with a focus on customers in Europe, the USA and North Asia. In turn, it is
expected that the Reliant business will benefit from the Company's key strengths
in sourcing home shopping products in China and its connections with home
shopping product manufacturers in China, for the sale of home shopping products
in the USA.
The Vendors of Reliant are Kevin Harrington and Tim Harrington, who each have
over 20 years experience in the TV home shopping business. They will each remain
with Reliant after the Acquisition and have also agreed to join the board of
directors of the Company. Kevin Harrington (aged 50) has been appointed Chief
Executive Officer of the ResponzeTV group of companies (the `Group') and Tim
Harrington (aged 41) has been appointed Chief Operating Officer of the Group.
Kevin Harrington, Chairman and Chief Executive Officer of Reliant, said:
`Joining with ResponzeTV brings to Reliant the opportunity for enhanced growth
from the key strengths of ResponzeTV in sourcing products in China and through
its connections with manufacturers in China.'
The Company also announces that, on 11 January 2007, Andre Koo, Non-Executive
Vice Chairman of the Company, stepped down from the board of directors of the
Company and that James Huang, Executive Director, agreed to become a Non-
Executive Director of the Company. Andre Koo commented: `After being involved
with the Company since April 2004 and helping guide it to this stage of its
development, I am able to step down from active management involvement. I am
confident that the Company, and my continuing interest in its future through my
interest in shares held by MediaXposure, is in good hands under the existing
Board of Directors and the new management of Reliant.'
Steven Goodman, Executive Chairman of ResponzeTV PLC, said: `I am pleased that
the various measures taken by the Board in 2006 to restructure the Company, its
business and operations, have placed the Company in the position to embark on
such an exciting opportunity as the acquisition of Reliant. The acquisition fits
well with the Company's existing international sourcing business. It also
represents the first step in our stated strategy of expansion by acquisition in
the Company's core geographic and business areas. The Company will continue to
look at appropriate further opportunities. Kevin and Tim Harrington have an
impressive track record in the DRTV and home shopping business and I welcome
them to the board of the Company. Finally, I would like to thank Andre Koo for
his support and all his efforts on behalf of the Company, as well as
MediaXposure which, through its investment of US$29.5million for shares of the
Company, has shown its commitment to the Company.'
For further enquiries contact:
Steven Goodman,
Executive Chairman, ResponzeTV PLC
+852 2295 1161
Tom Steiner,
Edelman Financial, London
+44 (0)20 7344 1290
Introduction
The Company today announces that it has acquired the entire issued and
outstanding share capital of Reliant, a Florida, USA based TV home shopping
company. The consideration will be the issue to the Vendors of an aggregate
maximum of 44,576,349 new ordinary shares of 16p each in the Company,
representing 45% of the issued share capital of the Company as enlarged by such
issue.
Completion of the Acquisition took place on 11 January 2007, with an effective
date of 1 January 2007. On completion the Company issued to the Vendors
13,620,551 Consideration Shares, representing 20% of the issued share capital of
the Company as enlarged by such issue. The Company will issue a further
4,540,184 Consideration Shares to the Vendors by 31 August 2007, representing a
further 5% of the issued share capital of the Company as enlarged by such
issues.
The balance of 26,415,614 Consideration Shares (being a further 20% of the
issued share capital of the Company as enlarged by all such issues) will be
issued by way of earn-out and is dependant on the financial performance of
Reliant for the financial years ending 31 December 2007 and 31 December 2008.
The full amount of Consideration Shares pursuant to the earn-out will be issued
if the average pre-tax profits of Reliant for each of those two financial years
are not less than US$4.5m and if certain cash balance and other targets are met.
The Consideration Shares will be subject to a lock-in until 30 June 2009,
subject to certain exceptions.
In addition, Reliant will repay up to US$1.15m of indebtedness owed to the
Vendors out of pre-tax profits earned during the earn-out period.
No shareholder approval is required for the Acquisition. The directors of the
Company intend, at the Company's next Annual General Meeting, to seek
shareholder approval for certain additional authorities required for the issue
of the Consideration Shares which were not issued at completion.
As part of the arrangements, the Company has agreed to arrange for a new US$2m
banking facility to be made available to Reliant.
Overview of Reliant and the Vendors
Reliant commenced operations in September 2005. It was formed to act as a DRTV
operator in the US market, developing proprietary products, producing
infomercials and buying media. It uses television air-time to initiate DRTV
revenues and later to drive retail sales. It currently licenses, to third
parties, product rights for the rest of the world exploitation of its products.
It also sells products on TV home shopping channels in the US, including on The
Home Shopping Network and operates through the website `www.TVgoods.com'.
Reliant's current DRTV products include `Dual Drill', `Scunci Steamer', `Memory
Power', `Rock Bottom Slots' and `Scrub King'. Its current TV home shopping
products include the `Professor Amos' branded line of cleaning agents and the
`Tony Little' branded line of fitness products.
It is currently developing a number of other products and projects for launch in
2007. These include the `Chef Robert Irvine' signature line of cookware products
to be marketed alongside his new `Dinner Impossible' show, planned to be
launched on The Food Channel.
Kevin Harrington, Reliant's Chairman and CEO, is widely acknowledged as a
principal pioneer of the infomercial industry. His first infomercial, produced
in 1984, is generally considered the original infomercial that launched the
industry. To date, he has produced over 500 infomercials, and achieved total
sales approaching US$4 billion, with 20 of the infomercials grossing over US$100
million each. He and his brother, Tim Harrington, Reliant's President, formed
their first company, Quantum International Inc in 1985 before merging it with
National Media Corp in 1991. Between 1994 and 1998, Kevin and Tim Harrington had
a joint venture with The Home Shopping Network to create a new business `HSN
Direct'. They formed Reliant Interactive Media Inc in 1999, which they sold to
Thane International Inc in 2001, before starting Reliant's operations in 2005.
Kevin and Tim Harrington are founder members of the Electronic Retailing
Association.
Both Kevin and Tim Harrington are currently directors of Omni Reliant Holdings
Inc. Kevin and Tim Harrington were also previously CEO and President
respectively of Reliant Interactive Media Corp and HSN Direct.
Reliant currently operates from a single office in Tampa, Florida and has 11
members of staff, including the Vendors. In view of the short period since it
commenced operations, Reliant has not produced audited accounts.
Principal Terms of the Acquisition
The consideration will be the issue to the Vendors of an aggregate maximum of
44,576,349 Consideration Shares, representing 45% of the issued share capital of
the Company as enlarged by such issue.
On completion of the Acquisition, the Company issued to the Vendors 13,620,551
Consideration Shares, representing 20% of the issued share capital of the
Company as enlarged by such issue. The Company will issue a further 4,540,184
Consideration Shares to the Vendors by 31 August 2007, representing a further 5%
of the issued share capital of the Company as enlarged by such issues.
The balance of up to 26,415,614 Consideration Shares (being 20% of the issued
share capital of the Company as enlarged by all such issues) will be issued by
way of earn-out and is dependant on the financial performance of Reliant for FY
2007 and FY 2008, as follows:
(a) in relation to FY 2007, an earn-out of 11,175,836 Consideration Shares will
be issued to the Vendors if the pre-tax profits of Reliant for that year
are not less than US$4.5 million (`FY 2007 Profit Target') and if the cash
balance of Reliant at the end of that year is not less than 25 percent of
the FY 2007 pre-tax profit, or such lesser percentage as the Vendors and
the Company may agree (`FY 2007 Cash Target'). Any shortfall in the FY 2007
Profit Target will reduce the number of Consideration Shares to be issued
in respect of FY 2007 on a pro rata basis and any shortfall in the FY 2007
Cash Target will reduce 50% of such number of Consideration Shares on a pro
rata basis; and
(b) in relation to FY 2008, provided the pre-tax profits of Reliant are greater
than the FY 2007 pre-tax profits, an earn-out of 26,415,613 Consideration
Shares will be issued to the Vendors if the average pre-tax profits of
Reliant for FY 2007 and FY 2008 combined are not less than US$4.5 million
(`FY 2007/2008 Profit Target') and if the cash balance of Reliant at the
end of FY 2008 is not less than 25 percent of the FY 2007 and FY 2008 pre-
tax profits, or such lesser percentage as the Vendors and the Company may
agree (`FY 2008 Cash Target'). Any shortfall in the FY 2007/2008 Profit
Target will reduce the number of Consideration Shares to be issued in
respect of FY 2008 on a pro rata basis and any shortfall in the FY 2008
Cash Target will reduce 50% of such number of Consideration Shares on a pro
rata basis. The number of Consideration Shares issued in respect of the FY
2007 earn-out will be deducted from the number of Consideration Shares to
be issued in respect of the FY 2008 earn-out.
The Consideration Shares will be subject to a lock-in until 30 June 2009 and the
Vendors have agreed that thereafter they will not dispose of more than one-third
of the Consideration Shares in any period of six-months. The lock-in is subject
to certain exceptions, including:
(a) in respect of disposals required to raise cash to fund tax liabilities of
the Vendors arising from the Acquisition;
(b) in respect of disposals to raise an aggregate amount of up to US$108,000
after 31 March 2008; and
(c) if at any time prior to 30 June 2009 MediaXposure Limited (Cayman) which,
prior to the Acquisition, owned approximately 92% of the Company's issued
share capital, transfers a proportion of its holding of shares in the
Company, the Vendors may transfer up to the same proportion of their
Consideration Shares.
At completion, Reliant owed indebtedness of US$1.15 million to the Vendors, who
have agreed that it will be repayable as follows:
(a) on 31 March 2007 and 31 March 2008 - the sums of US$90,000 and US$108,000
respectively;
(b) at the rate of 25 percent of pre-tax profits of Reliant for FY 2007,
subject to the FY 2007 Cash Target adjustment (to a maximum of US$625,000),
less US$198,000; and
(c) at the rate of 25 percent of pre-tax profits of Reliant for FY 2008,
subject to the FY 2008 Cash Target adjustment.
To the extent that repayment is not due under the above targets, the Vendors
waive the right to repayment of such amounts.
Under the terms of the acquisition agreement, the Vendors have given warranties
and representations in respect of certain business, taxation and other matters,
subject to agreed limitations on liability.
The Vendors have each entered into new employment agreements with Reliant under
which Kevin Harrington has been appointed as Group Chief Executive Officer and
Tim Harrington has been appointed as Group Chief Operating Officer. The
employment agreements are terminable by either party on 12 months notice
expiring not earlier than 31 December 2008. The terms of engagement also contain
provisions for early termination, inter alia, in the event of a breach of
duties. There are no provisions for benefits upon termination of employment. The
remuneration payable under each agreement is US$300,000 per annum plus bonus.
Each Vendor is also entitled to an allowance for automobile expenses of US$1,500
per month and is entitled to reimbursement of health and disability insurance,
and life insurance premiums, at rates to be agreed from time to time.
Substantial Shareholder
Following the acquisition of Reliant and the issue of 13,620,551 Consideration
Shares to the Vendors, MediaXposure Limited (Cayman)'s interest of 50,136,655
ordinary shares of 16 pence each in the Company represents 73.62 per cent. of
the total issued share capital of the Company.
Admission
Application has been made for 13,620,551 ordinary shares of 16p each in the
Company to be admitted to trading on the London Stock Exchange's AIM market for
listed securities ("Admission"). Admission is expected to become effective on 17
January 2007.
11 January 2007
For further enquiries contact:
Steven Goodman,
Executive Chairman, ResponzeTV PLC
+852 2295 1161
Tom Steiner,
Edelman Financial, London
+44 (0)20 7344 1290
Responzetv (LSE:RETV)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024
Responzetv (LSE:RETV)
Graphique Historique de l'Action
De Juin 2023 à Juin 2024
