Jun. 14, 2011 (Canada NewsWire Group) --
HALIFAX, June 14, 2011 /CNW/ - Clarke Inc. ("Clarke" or the "Company") (TSX: CKI CKI.DB CKI.DB.A) announced today that Countdown Media L.P. ("Countdown") sold its assets and operations to a strategic buyer. Countdown is a leading music licensing and distribution entity that owns and licenses one of the largest catalogues of any independent music label. Countdown was established as part of the restructuring of Madacy Entertainment LP ("Madacy"), in which Clarke acquired a 50% interest as part of a privatization that occurred in March 2009. The sale represents the divestiture by Clarke of its remaining interest in the Madacy business and will result in Clarke's exit from the Entertainment segment.
Clarke received approximately $5 million on closing, net of the repayment of certain indebtedness, and will be entitled to receive up to $1.75 million in cash if applicable earn out thresholds for the business are satisfied in 2011 and 2012. Clarke had an investment in Countdown with a nominal carrying value, and consequently the transaction will result in a gain to Clarke of approximately $8 million in the second quarter of 2011. To the extent that earn out payments are received in the future, further gains will be realized by Clarke.
Rob Normandeau, President and CEO of Clarke, commented: "The sale of Countdown represents the completion of a successful restructuring of Madacy. It also furthers our strategic goal of consolidating Clarke's holdings into a smaller group of core investments. We wish the new owners and all of the employees the best as they continue with the business."
Los Angeles-based Siemer & Associates provided advisory services to Countdown on this transaction.
About Clarke
Halifax-based Clarke Inc. invests in undervalued businesses and participates actively where necessary to enhance performance and increase return. Clarke's securities trade on the Toronto Stock Exchange (CKI, CKI.DB; CKI.DB.A); for more information about Clarke Inc., please visit our website at www.clarkeinc.com.
Note on Forward-Looking Statements
This press release may contain or refer to certain forward-looking statements relating, but not limited to, the Company's expectations, intentions, plans and beliefs with respect to the Company. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "does not expect", "is expected", "budget", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or equivalents or variations, including negative variations, of such words and phrases, or state that certain actions, events or results, "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. Forward-looking statements include, without limitation, those with respect to the future price of securities held by the Company, changes in these securities holdings, changes to the Company's hedging practices, currency fluctuations, requirements for additional capital, changes to government regulations and the timing and possible outcome of pending litigation. Forward-looking statements rely on certain underlying assumptions that, if not realized, can result in such forward-looking statements not being achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements.
With respect to the Company's Investment segment, such risks and uncertainties include, without limitation, the Company's investment strategy, legal and regulatory risks, general market risk, potential lack of diversification in the Company's investments, reliance on certain key executives, interest rates and foreign currency fluctuations and other factors. With respect to the Company's Freight Transportation segment, such risks and uncertainties include, without limitation, competition, expiry of certain leases, labour relations, the use of third party service providers, dependence on certain personnel, fuel costs, weather conditions, customer relationships, claims, litigation and insurance, government regulation of the transport industry and other factors. With respect to the Company's Home Heating segment (formerly the Steel Tanks segment), such risks and uncertainties include, without limitation, the costs of housing and major consumer products, energy costs, alternative energy sources, steel costs, product liability risk, foreign exchange risk, and other factors. With respect to the Company's Entertainment segment, such risks and uncertainties include, without limitation, the impact of the Internet on retail distribution channels and delivery format. Other general risks and uncertainties include, without limitation, environmental considerations, use of information technology and information systems, safety issues, concentration of sales among a small number of customers, the seasonality of business cycles for certain segments, commodity market risk, risks associated with investment in derivative instruments and other factors.
Although the Company has attempted to identify important factors that could cause actual actions, events or results or cause actions, events or results not to be estimated or intended, there can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Other than as required by applicable Canadian securities laws, the Company does not update or revise any such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements.
We seek Safe Harbor.
Ian Wilkie
Chief Financial Officer
Clarke Inc.
Telephone: (902) 442-3990