MIRABEL, QC, Nov. 6 /CNW Telbec/ - Game Day Entertainment, LLC ("Game Day") and Kangaroo Media Inc. ("Kangaroo") (TSXV:KTV) announced today that they have entered into a definitive arrangement agreement for the acquisition of Kangaroo by Game Day.
Under the terms of the definitive arrangement agreement, shareholders of Kangaroo will receive Cdn $0.40 in cash, for each common share of Kangaroo outstanding at closing, subject to a possible upward adjustment. The purchase price of Cdn $0.40 per share represents a premium of approximately 344% over the $0.09 closing price of the common shares on the TSX Venture Exchange ("TSXV") on November 5, 2009, the last trading day prior to this announcement (and a premium of approximately 326 % over the 20-day volume weighted average closing price of the common share of Kangaroo on the TSXV). In addition, all outstanding options and warrants that have not been exercised prior to the closing will be cancelled for no consideration.
The upward adjustment of the per share price, if any, will depend on the cash deficiency of Kangaroo at closing (the "Final Closing Cash Deficiency"), being the amount of cash required by Kangaroo to satisfy certain of its obligations prior to closing, which obligations are specifically set forth in the definitive arrangement agreement. These obligations include, but are not limited to, repurchasing for cancellation, for an amount equal to US$4,000,000, the option that Kangaroo has previously granted to Front Row IP Holdings, L.L.C. The option was granted as part of the settlement agreement reached between Kangaroo and Front Row Technologies, LLC, effective July 14, 2009, that provided Front Row IP Holding, LLC with the right to acquire 19.9% of the outstanding equity of Kangaroo on December 31, 2012. According to the definitive arrangement agreement, if the Final Closing Cash Deficiency is less than the current estimate of $3.8 million (the "Targeted Cash Deficiency"), then the shareholders of Kangaroo will receive their pro rata share of the difference between the Targeted Cash Deficiency and the Final Closing Cash Deficiency.
The transaction is structured as an arrangement under the Canada Business Corporations Act and is subject to a number of customary conditions, including approval by two-thirds of Kangaroo shareholders, as well as requisite court approvals in Quebec, Canada and other regulatory approvals. The transaction will be submitted to Kangaroo shareholders for approval at a special meeting expected to be held in mid-December 2009.
Certain shareholders, directors and officers of Kangaroo, representing approximately 25.7 % of the outstanding shares of Kangaroo, have executed agreements pursuant to which they have agreed to vote in favor of the proposed arrangement. In addition, an important shareholder has indicated verbally its intention to vote its shares of Kangaroo representing approximately 5.3 % of the outstanding shares of Kangaroo, in favour of the proposed arrangement.
The board of directors of Kangaroo, consisting of Pierre Boivin (Chairman), George Rossi and Alain Rhéaume, each of whom is independent within the meaning of applicable securities laws, engaged RSM Richter Inc. to act as its financial advisor in connection with the transaction. RSM Richter has provided an opinion to the board of directors that the arrangement is fair, from a financial point of view to shareholders. The board of directors has unanimously approved the arrangement agreement, determined that the arrangement is: (i) fair, from a financial point of view to the shareholders of Kangaroo; and (ii) in the best interests of Kangaroo and its security holders and unanimously recommends that shareholders vote in favour of the proposed arrangement.
Additional details regarding the terms of the arrangement and the special meeting will be provided in the management information circular to be mailed by Kangaroo to all its securityholders in connection with such special meeting.
The arrangement is expected to close in late December 2009. Following closing of the transaction, the common shares of Kangaroo will cease trading on the TSXV and Kangaroo will operate as a wholly-owned subsidiary of Game Day.
"We're excited to add Kangaroo Media to our live event fan enhancement program and see it as an important component to the overall fan experience at events", said Michael Weisman, Executive Producer of Game Day. "Kangaroo Media handheld TV delivery system will provide the mobile wireless delivery of our overall event experience offering. Kangaroo presents a solid investment for our company."
Game Day Entertainment is a new company with a mission to focus on fan enhancement at live venues including sporting events and concerts. Its goal is to create an exclusive entertainment moment at the event that a fan will remember as special and exciting. Part of its assets will include a complete production and delivery environment including event day scheduling, content creation and content delivery. KTV will provide one of the mechanisms for content delivery and personalization.
Pierre Boivin, Chairman of the Board of Kangaroo explained, "For our company, this is an appealing transaction on several levels. First, it is strategic in nature since under this new shareholder our company will be able to continue to extend its reach into stadium venues across the United States and elsewhere and, just as importantly, it will have both the financial and operational capabilities to capture future opportunities. From a shareholder perspective, this transaction creates an immediate opportunity for all shareholders to monetize their investment at an attractive premium to trading trends of the past year. For our clients and partners, they have the assurance that Kangaroo will continue to work with and for them and invest in the technology and in the fan experience. Finally, for our employees, they have the benefit of a more certain future within a company that will have growth possibilities and access to capital going forward."
About Game Day Entertainment, LLC
Game Day Entertainment LLC is a newly formed company that combines television and event production experience from industry leaders to deliver a unique and exclusive fan experience at live events. Based in New York City, it draws on industry experts with years of experience in television production with content and technical expertise leveraging latest technology and best practices in live event production.
About Kangaroo Media Inc.
Kangaroo Media Inc. is a market leader in enhancing the in-venue sports fan experience. The company develops and commercializes hand-held wireless audiovisual multi-functional entertainment systems that enable users to expand and tailor their onsite viewing experience of sporting events. Kangaroo Media's technology helps deliver realtime video, audio and data content to each fan's hand-held Kangaroo TV device. It gives fans the ability to create their own tailor-made live-action sports viewing on-site. Kangaroo Media, headquartered near Montreal, Canada, is listed on the TSXV as KTV.V. For more information, visit www.kangaroo.tv.
This news release contains statements that constitute "forward-looking information" or "forward-looking statements" (collectively "forward-looking information") within the meaning of applicable securities legislation. More particularly, and without limitation, this news release contains forward-looking information concerning: timing of mailing of Kangaroo's management information circular, timing of Kangaroo's meeting of security holders to consider the arrangement and timing of closing of the proposed transaction. This forward-looking information is subject to numerous risks and uncertainties, certain of which are beyond Kangaroo's and Game Day's control including, without limitation, uncertainty related to the completion of the proposed transaction, global capital markets activity and general economic conditions in North America. Readers are cautioned that the foregoing list of risk factors is not exhaustive. Additional information on these and other factors that could affect Kangaroo's results are included in reports on file with Canadian securities regulatory authorities. Kangaroo's actual results, performance or achievements may differ materially from those expressed in, or implied by this forward-looking information and, accordingly, no assurance can be given that any events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that Kangaroo will derive therefrom. Forward-looking information is based on the estimates and opinions of Kangaroo's management at the time the information is released and Kangaroo does not undertake any obligation to update publicly or to revise any of the forward-looking information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Neither the TSXV nor its Regulation Services Provider (as that term is
defined in the policies of the TSXV) accepts responsibility for the
adequacy or accuracy of this release.
SOURCE KANGAROO MEDIA INC.
For further information: For further information: Pierre Boivin, Chairman of the Board, Kangaroo Media Inc., (450) 595-2000; Michael Weisman, Executive Producer, Game Day Entertainment LLC, (212) 838-0513