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Acquisition to further round out SilverBirch offering in the video game
industry
TORONTO, July 2 /CNW/ - SilverBirch Inc. (TSX-V: SVB), a leading digital media company, today announced an agreement in principle to acquire all of the outstanding shares of Red Mile Entertainment, Inc. (OTC BB: RDML), a California-based video game publisher with worldwide rights to established brands and intellectual properties including the "Heroes" flight combat franchise.
Red Mile, an NASD OTC Bulletin Board listed company, has developed and published a number of successful console and PC titles including Heroes Of The Pacific, which sold over 600,000 units. Current projects in development include a sequel, Heroes Over Europe, which is anticipated to be released in early 2009, and another highly anticipated licensed title, for which the company will seek a co-publishing partner.
"Red Mile's position as a strong console publisher of both original and licensed IP complements our core focus in the video game industry," commented Derek van der Plaat, CEO of SilverBirch. "With our publishing capability in Massive Multiplayer Online Games (MMOGs), PC and handheld games, the acquisition of Red Mile further rounds out SilverBirch's capability as a comprehensive publisher."
"SilverBirch's strategy to grow through strategic acquisitions is a vision that Red Mile shares and one that we can contribute to in a meaningful way to position the combined entity as a leading integrated video game publisher," added Chester Aldridge, CEO of Red Mile.
Red Mile is expected to contribute over $7 million in revenue and roughly $2 million in EBITDA starting in 2009. SilverBirch has advanced a bridge loan of $750,000 CAD dollars to Red Mile as part of the acquisition terms, and will also issue seven-eighths of one SilverBirch share from treasury in exchange for each Red Mile share, plus an earn-out based on future revenue targets. Currently 16,544,461 Red Mile shares and warrants qualify for the transaction, which equates to 14,476,403 new Silverbirch shares. The transaction is subject to regulatory and exchange approvals both in Canada and the United States as well as, in the case of Red Mile, shareholder approval.
About SilverBirch Inc.
Toronto-based SilverBirch Inc. is a leading digital media company focused on the fastest-growing sectors of the video game and mobile markets. Operating companies include Jambo Mobile Solutions, a fully integrated mobile media company with capabilities in mobile messaging and mobile content delivery, and SilverBirch Studios, a multi-platform video game developer and operator of an MMORPG (massive multiplayer online role-playing game) called Metin2 (see www.metin2.us). For more information, please visit www.silverbirchstudios.com and www.jambomobile.com.
About Red Mile Entertainment, Inc.
Red Mile Entertainment, Inc. is a worldwide developer and publisher of interactive entertainment software. Headquartered in San Anselmo, California, the company creates, incubates and licenses premier intellectual properties and develops products for console video game systems, personal computers and other interactive entertainment platforms. For more information, visit www.redmileentertainment.com.
Cautionary Notes:
As noted above, completion of the transaction is subject to a number of conditions, including but not limited to, acceptance by the TSX Venture Exchange and approval of the shareholders of Red Mile. The transaction cannot close until the required approvals have been obtained. There can be no assurance that the transaction will be completed as proposed or at all.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of the content of this news release.
The securities of SilverBirch described in this news release have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to a U.S. person absent an available exemption from the registration requirements of such Act.
Forward-Looking Statements - Certain information set forth in this news release, including management's assessment of future plans and of the contribution of Red Mile to SilverBirch's revenue and EBITDA starting in 2009, contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are based upon management's assessment of Red Mile's future plans and operations and are based on Red Mile's current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. These forward-looking statements are subject to numerous risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties, certain of which are beyond management's control, include completion of the proposed transaction on the terms currently contemplated, the impact of general economic conditions, industry conditions, currency fluctuations, and the anticipated operating costs of Red Mile which may impact EBITDA assumptions. 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. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.
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