May 6, 2011 (Canada NewsWire Group) --
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TORONTO, May 6 /CNW/ - Mood Media Corporation (ISIN: CA61534J1057) (TSX:MM/ LSE AIM:MM) ("Mood Media") announced today that it has completed its previously announced acquisition of Muzak Holdings LLC ("Muzak") for US$345 million including net debt repaid on closing (the "Muzak Acquisition").
Mood Media's acquisition of Muzak, whose suite of brand enhancing music, voice and digital offerings reach more than 100 million people every day, creates a global in-store media provider servicing over 470,000 commercial locations in over 39 countries. On a pro forma basis the newly combined company has trailing last twelve months (LTM) revenue of approximately US$400 million and trailing LTM EBITDA in excess of US$100 million.
Lorne Abony, CEO and Chairman of Mood Media, commented: "We are delighted to complete this transformative acquisition, which enables us to become a truly global leader in this space. We are excited and eager to begin realizing the significant growth opportunities and synergies in a combination that will benefit both our customers and our shareholders."
Mood Media satisfied the US$345 million purchase price as follows: (i) approximately US$305 million in cash, (ii) by the issue of US$5 million 10% convertible unsecured subordinated debentures having an exercise price of US$2.43 per common share and maturing on October 31, 2015, and (iii) as to remainder, by the grant of warrants to purchase 4,407,543 common shares of Mood Media (representing approximately 3% of Mood Media's fully diluted common shares), at an exercise price of US$3.50 and expiring five years from the date of issuance. Further consideration of up to a maximum of US$30 million in cash may be paid over the three years following closing in the event Mood Media achieves certain minimum EBITDA targets during such period.
In connection with closing and to refinance its existing bank debt, Mood Media has entered into new credit facilities with Credit Suisse Securities AG, as agent, consisting of a US$20 million 5-year revolving credit facility, a US$355 million 7-year first lien term loan and a US$100 million 7.5-year second lien term loan.
Also in connection with the closing of the Muzak Acquisition, Mood Media completed a private placement of 5,396,015 common shares at a subscription price of $2.51 per common share for gross proceeds of $13,543,997.65. The proceeds of the private placement were used by Mood Media to satisfy in part the cash consideration under the Muzak Acquisition, transaction expenses and for general corporate purposes.
About Mood Media Corporation
Mood Media Corporation (TSX:MM/ LSE AIM:MM) is a leading in-store media specialist that uses a mix of music, visual and scent media to help its clients communicate with consumers with a view to driving incremental sales at the point-of-purchase.
Operating through its two principal divisions; In-Store Media and Retail Point-of-Purchase, Mood Media Corporation works with more than 800 retail chains in more than 30 countries throughout North America, Europe, Asia and Australia.
Through its subsidiaries Mood Media and Mood Entertainment, Mood Media Corporation is driving growth of in-store media solutions across multiple markets.
Mood Media Corporation operates an international in-store media and music retail business with an extensive geographic footprint and a broad client base including several multinational blue chip organizations.
For more information on Mood Media Corporation visit www.moodmedia.com.
About Muzak
For over 75 years, Muzak has been at the forefront of the sensory branding industry. By acquiring, designing and delivering rich media-based solutions to clients worldwide, its services reach 100 million people every day. Through a national sales and service network, Muzak designs, delivers and installs custom music, voice messaging, Digital Signage networks, leading drive-thru equipment and professional sound systems to a variety of clients in multiple industries including retail, hospitality and restaurant.
For more information, visit www.muzak.com
Stock Exchange Matters
The common shares issued pursuant to the private placement, as well as those underlying the convertible debentures and warrants issued as partial consideration in connection with closing of the Muzak acquisition, have been conditionally approved for listing on the Toronto Stock Exchange, subject to satisfaction of the exchange's customary conditions.
Application has been made to the London Stock Exchange for admission of the 5,396,015 new common shares issued pursuant to the private placement, which will rank pari passu in all respects with the existing common shares, to trading on AIM. It is expected that admission to AIM will become effective and that dealings in the new common shares will become effective on May 9, 2011.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements. The words "believe", "expect", "anticipate", "estimate", "intend", "may", "will", "would" and similar expressions and the negative of such expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to important assumptions, including the following specific assumptions: the ability of Mood Media and Muzak to meet their respective revenue targets; the ability to achieve cost synergies; general industry and economic conditions; changes in Mood Media's or Muzak's relationships with their customers and suppliers; pricing pressures; and other competitive factors; and changes in regulatory requirements affecting the businesses of Mood Media and Muzak. While Mood Media considers these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Historical performance may not be indicative of future performance.
Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: the impact of general market, industry, credit and economic conditions, currency fluctuations as well as the risk factors identified in the Risk Factors section of Mood Media's management discussion and analysis dated March 7, 2011 and the risk factors identified in the annual information form of Mood Media dated March 30, 2011, both of which are available on www.sedar.com.
Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. All of the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Mood Media.
Forward-looking statements are given only as at the date hereof and Mood Media disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws.
The convertible debentures, the warrants and the common shares issuable upon the conversion or exercise thereof and the common shares issued pursuant to the private placement are not and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or applicable exemption from registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction.
Mood Media presents EBITDA information as a supplemental figure because management believes it provides useful information regarding operating performance. EBITDA is not a recognized measure under Canadian GAAP, does not have standardized meaning, and is unlikely to be comparable to similar measures used by other companies. Accordingly, investors are cautioned that EBITDA should not be construed as an alternative to net earnings or (loss) determined in accordance with GAAP as an indicator of the financial performance of Mood Media or as a measure of the Mood Media's liquidity and cash flows.
Patrick Fitzgibbons, Fleishman-Hillard (New York), Tel: +1 212 453 2124, E-mail: Patrick.fitzgibbons@fleishman.com; Alan O'Sullivan, Fleishman-Hillard (London), Tel: +44 20 7395 7017, E-mail: alan.osullivan@ fleishmaneurope.com; Dominic Morley, Panmure Gordon, Tel: +44 207 459 3600