Acquisition & Appointment of NonExecutive Director

 

TIDMBRST 
 
RNS Number : 7914J 
Burst Media Corporation 
07 April 2010 
 

 
 
                                                                    7 April 2010 
 
               Burst Media Corporation ("Burst" or the "Company") 
 
                    Acquisition of On The Phone Media Limited 
                                      and 
                          Appointment of Board director 
 
Burst is pleased to announce that it has acquired On The Phone Media Limited - 
trading as OTP Media - ("OTP"), a leading premium advertising network in the UK 
(the "Acquisition"). 
 
OTP was established in 2002 and has grown to become a leading advertising 
network in the UK, with a particular focus on premium advertising. OTP's 
publisher relationships cover verticals including parenting, automotive, sport, 
food and entertainment. OTP's advertiser relationships include Marriott Hotels, 
Mercedes, O2, Paramount and Pepsi. 
 
Initial cash consideration of GBP1.575 million ($2.38 million) has been paid and 
an aggregate of one million new Burst common shares (the "Initial Consideration 
Shares")1 have been issued to the vendors of OTP. Further consideration of up to 
GBP1.10 million ($1.66 million) in cash and the issue of up to two million new 
Burst Shares (altogether the "Further Consideration") may become payable by 
Burst to certain of the vendors of OTP who are remaining with OTP following 
completion of the Acquisition. The Further Consideration becomes payable only 
upon OTP achieving certain financial targets over the period from completion of 
the Acquisition to 31 December 2011. 
 
The maximum amount of the Further Consideration will become payable in the event 
that OTP achieves revenues of GBP2.5 million and profit before tax of GBP0.205 
million in the period from completion of the Acquisition to 31 December 2010, 
and revenues of GBP4.035 million and profit before tax of GBP0.375 million for 
the year ending 31 December 2011. If such targets are not achieved, the Further 
Consideration shall be reduced in proportion. No Further Consideration shall 
become payable if OTP achieves less than 75 per cent of these financial targets. 
 
Burst has acquired OTP on a debt free basis and with appropriate levels of 
working capital, including cash headroom. To the extent that such headroom 
proves to be in excess of OTP's actual working capital requirements, a further 
payment of up to GBP75,000 ($113,600) may become payable to the vendors of OTP 
six months following completion of the Acquisition. 
 
All of the new Burst common shares issued and to be issued in consideration for 
the Acquisition are and will be subject to lock in and orderly marketing 
provisions. 
 
OTP has 11 employees and is based in London. OTPs managing director, Ian 
Woolley, and commercial director, Simond ffiske, are both staying with the 
enlarged Burst group following completion of the Acquisition. 
 
In the year ended 31 March 2009, OTP recorded unaudited adjusted profit before 
tax of GBP0.17 million on unaudited turnover of GBP2.7 million. As at 31 March 
2009 OTP had unaudited total assets of GBP0.86 million. 
 
Burst was the 16th largest ad network in the UK in February 2010, reaching 
nearly 12.3 million unique viewers. (Source: comScore) The Burst Board believes 
that the Acquisition will broaden Burst's international capabilities and 
significantly strengthen its position in the UK market. Additionally, potential 
revenue synergies have been identified whereby OTP will monetise certain of 
Burst's existing advertising inventory in the UK. It is expected that the 
Acquisition will be earnings enhancing during the current financial year ending 
31 December 2010. 
 
Tim Trotter, non-executive chairman of OTP, has been appointed to the board of 
Burst as a non-executive director with immediate effect. Mr Trotter joined the 
board of OTP in 2007 and has substantial experience in the UK marketing and 
advertising sector. He is currently the non-executive Chairman of Vislink PLC, 
non-executive Chairman of Flying Brands Limited, and non-executive Chairman of 
Smithfield Consultants Limited. Further disclosures regarding Mr. Trotter are 
given below. 
 
Application will be made for the Initial Consideration Shares to be admitted to 
trading on AIM. Following the admission to trading of the Initial Consideration 
Shares, Burst will have 71,628,562 common shares in issue. 
 
Jarvis Coffin, Chief Executive of Burst, commented: 
"OTP Media shares our core value of championing online vertical content and the 
web publishers that produce it. This acquisition adds to the value of what both 
companies can bring to UK publishers and the resources they can put to work for 
UK advertisers trying to reach engaged audiences online. OTP provides us with a 
stronger presence in the strategically important UK market and resumes our 
stated intention to expansion outside of the US." 
 
Ian Woolley, Managing Director of OTP, commented: 
"By joining forces with the industry's premier provider of services to vertical 
content publishers, we now have access to their proven business processes and 
technical resources, The acquisition of OTP by Burst helps us both to expand our 
services and solutions that we provide publishers, and it will allow advertisers 
to engage more closely with their target audiences." 
 
 
Enquiries: 
 
+------------------------------+------------------------------+ 
| Burst Media Corporation      |                              | 
+------------------------------+------------------------------+ 
| Jarvis Coffin, Chief         | Tel: [phone]         | 
| Executive Officer            |                              | 
| Steve Hill, Chief Financial  |                              | 
| Officer                      |                              | 
|                              |                              | 
+------------------------------+------------------------------+ 
 
+------------------------------+------------------------------+ 
| Hudson Sandler               |                              | 
+------------------------------+------------------------------+ 
| Nick Lyon                    | Tel: [phone]    | 
|                              |                              | 
+------------------------------+------------------------------+ 
| Altium                       |                              | 
+------------------------------+------------------------------+ 
| Tim Richardson / Paul        | Tel: [phone]    | 
| Chamberlain                  |                              | 
+------------------------------+------------------------------+ 
 
Notes: 
 
1. Based on the closing price of a Burst common share on 6 April 2010 of 7.75p 
($0.12), as derived from Daily Official List of the London Stock Exchange, the 
value of the Initial Consideration Shares was GBP77,500 ($117,400). 
 
2.Exchange rate used throughout this announcement - GBP1 = $1.51. 
 
3. Any statements in this press release about future expectations, plans, and 
prospects for the Company, including statements about the estimated revenue of 
the Company, and other statements containing the words "estimates", "believes", 
"anticipates", "plans", "expects", "will", and similar expressions, constitute 
forward-looking statements. Actual results may differ materially from those 
indicated by such forward-looking statements as a result of various important 
factors, including the unpredictable nature of our rapidly evolving market and 
fluctuations in our business; the effects of competition; any adverse changes in 
our customers' business, and other factors discussed in our latest annual report 
and other filings. In addition, the forward-looking statements included in this 
press release represent our views as of 1 April 2010. We anticipate that 
subsequent events and developments may cause our views to change. However, while 
we may elect to update these forward-looking statements at some point in the 
future, we specifically disclaim any obligation to do so except insofar as may 
be required of the Company by the AIM Rules. These forward-looking statements 
should not be relied upon as representing our views as of any date subsequent to 
1 April 2010. 
 
 
Further information on Tim Trotter 
 
Timothy Hugh Southcombe Trotter, 51, is currently a director of the following 
companies: 
Bell Design & Communications Limited 
Bluefin Advisory Services Limited 
Bluefin Group Limited 
Flying Brands Limited 
h2glenfern Limited 
On The Phone Media Limited 
Smithfield Consultants Limited 
Smithfield Financial Limited 
Trotter & Co. Limited 
Vislink PLC 
 
Mr Trotter has also been a director of the following companies over the past 
five years: 
Ashsale Limited 
Big Green Door Limited 
Fiveten Group Limited 
Fiveten Group Finance Limited 
Fiveten Group Holdings Limited 
Green Issues Communications Holdings Limited 
JACTaG Holdings Limited 
Thinc Entities Limited 
Thinc Group Limited 
Thinc Group Holdings Limited 
WH Marks Sattin (UK) Limited 
 
Mr Trotter has confirmed that there are no other disclosures required in 
accordance with Schedule Two para (g) of the AIM Rules in relation to his 
appointment to the board of Burst. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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