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RETV Responzetv

24.50
0.00 (0.00%)
Last Updated: 01:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Responzetv LSE:RETV London Ordinary Share GB00B18X8Z87 ORD 16P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 24.50 0.00 01:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Acquisition of Famous Discoveries

02/04/2007 8:50am

UK Regulatory


    ResponzeTV PLC
                                        
                        Acquisition of Famous Discoveries
                                        
ResponzeTV PLC (the `Company'), announces that it has acquired the entire issued
and outstanding share capital of EXI International Corp (a Florida, USA company)
comprising a Florida-based TV home shopping business which trades under the name
of  Famous  Discoveries (`Famous Discoveries'). The consideration  will  be  the
payment of up to US$5,100,000 to be satisfied wholly by the issue to the vendors
of  Famous Discoveries (the `Vendors') of new ordinary shares of 16p each in the
Company (`Consideration Shares').

Completion  of  the  acquisition took place on 30 March 2007.  The  Company  has
agreed  to  pay to the Vendors by 31 August 2007 the sum of US$2,500,000,  which
will  be  satisfied by the issue of  3,144,594 Consideration Shares at an  issue
price of 40.5p per share, representing 4.41% of the current issued share capital
of  the  Company  as enlarged by such issue. Payment of the  balance  of  up  to
US$2,600,000,  which  will be satisfied by Consideration Shares  issued  at  the
market price as at the dates of each such issue, will be by way of earn-out  and
is  dependant on the financial performance of the business of Famous Discoveries
for the two years ending 28 February 2009 (`Earn-Out Period').

Famous  Discoveries, with a stable of over 100 products and brands,  complements
the  business of Reliant International Media LLC (`Reliant'), which was acquired
by the Company on 11 January 2007. It is anticipated that the Famous Discoveries
business  will  be  merged  with that of Reliant to  produce  cost  savings  and
enhanced benefits for both businesses from economies of scale. The directors  of
the  Company  believe  that this acquisition will also complement  the  existing
international  supply business of the Company, which sources wholesale  products
for  sale to TV direct response (`DRTV') and TV home shopping operators, with  a
focus on customers in Europe, the USA and North Asia.

The  Vendors  of Famous Discoveries are Akos Jankura and Bill Barlow,  who  each
have  over 12 years experience in the TV home shopping business and in  consumer
product development. They will each remain with the Famous Discoveries business,
and be employed by Reliant, after the acquisition.

Akos  Jankura,  President of Famous Discoveries, said: `Joining with  ResponzeTV
and  being part of the Reliant business brings to the Famous Discoveries' brands
and  products the opportunity for enhanced growth from combining the infomercial
production  strengths of Reliant with the branding skills of Famous Discoveries,
to provide end-to-end market penetration.'

Steven  Goodman, Executive Chairman of ResponzeTV PLC, said: `This  acquisition,
adding to the recent acquisition of Reliant, provides additional strength to our
home shopping business in the US. It also represents the next step in our stated
strategy  of  expansion  by  acquisition in the Company's  core  geographic  and
business  areas.  The  Company  will continue to  look  at  appropriate  further
opportunities.  Akos Jankura and Bill Barlow are well known to the  Company  and
have an impressive track record in the home shopping business.'

For further enquiries contact:

Steven Goodman,
Executive Chairman, ResponzeTV PLC
+852 2295 1161

Paul Lockstone,
Edelman Financial, London
+44 (0)20 7344 1325

Introduction

The  Company  today  announces  that  it has  acquired  the  entire  issued  and
outstanding  share capital of  EXI International Corp, a Florida, USA  based  TV
home  shopping  company which trades under the name Famous Discoveries  (`Famous
Discoveries').  The consideration will be the payment of up to US$5,100,000,  to
be  satisfied wholly by the issue to the Vendors of new ordinary shares  of  16p
each in the Company.

Completion  of  the acquisition took place on 30 March 2007, with  an  effective
date  of  1 March 2007. The Company will, by 31 August 2007, pay to the  Vendors
the sum of US$2,500,000, to be satisfied by the issue of 3,144,594 Consideration
Shares  at  an  issue price of 40.5p, representing 4.41% of the current   issued
share  capital of the Company as enlarged by such issue. Payment of the  balance
of  up  to US$2,600,000, which will be satisfied by Consideration Shares at  the
market  price  as at the date of such issue, will be by way of earn-out  and  is
dependant on the financial performance of the business of Famous Discoveries for
the  two years ending 28 February 2008 and 28 February 2009. The full amount  of
the  earn-out  will be paid if the average pre-tax profits attributable  to  the
Famous  Discoveries  business for each of those two  years  are  not  less  than
US$1,000,000 and if certain cash balance and other targets are met.

The  Consideration Shares will be subject to a lock-in until 30 September  2009,
subject to certain exceptions.

No  shareholder approval is required for the acquisition. The directors  of  the
Company  intend,  at  the  Company's  next  Annual  General  Meeting,  to   seek
shareholder approval for certain additional authorities required for  the  issue
of the Consideration Shares which were not issued at completion.

Overview of Famous Discoveries

Famous  Discoveries commenced operations in November 2005. It was formed to  act
as  a  DRTV  operator in the US market, developing products  for  home  shopping
channels around the world. It uses television air-time to initiate home shopping
revenues  and  later to drive retail sales. It also sells products  on  TV  home
shopping  channels  in the US, including on The Home Shopping  Network,  and  in
Germany,   Japan   and  the  UK  on  QVC.  It  operates  through   the   website
`www.famousdiscoveries.com'.

Famous  Discoveries currently operates from a single office  in  St  Petersburg,
Florida, close to Reliant's operations and has a satellite office in London, UK.
It  has  10 members of staff, including the Vendors. It is anticipated that  the
business of Famous Discoveries will be combined with that of Reliant to  provide
cost  savings and to give the benefit of economies of scale. Famous  Discoveries
has not produced audited accounts since it commenced operations.


Principal Terms of the Acquisition

The consideration will be the payment to the Vendors of an aggregate maximum  of
US$5,100,000, to be satisfied by the issue of Consideration Shares.

The Company will, by 31 August 2007, pay to the Vendors the sum of US$2,500,000,
to be satisfied by the issue of 3,144,594 Consideration Shares at an issue price
of  40.5p, representing 4.41% of the current issued share capital of the Company
as enlarged by such issue.

The   balance  of  up  to  US$2,600,000,  to  be  satisfied  by  the  issue   of
Consideration Shares at the market price as at the date of each issue,  will  be
by  way  of earn-out and is dependant on the financial performance of the Famous
Discoveries business for the Earn-Out Period, as follows:

(a)  in  relation  to the year ending 28 February 2008, an earn-out  payment  of
     US$1,300,000, to be satisfied by the issue of Consideration Shares  at  the
     then current market price, will be made if the pre-tax profits attributable
     to  the  Famous  Discoveries  business for that  year  are  not  less  than
     US$1,000,000 (`2008 Profit Target') and if the cash balance attributable to
     the Famous Discoveries business at the end of that year is not less than 25
     per cent of the pre-tax profit for that year, or such lesser percentage  as
     the  Vendors and the Company may agree (`2008 Cash Target'). Any  shortfall
     in  the 2008 Profit Target will reduce the payment for that year on  a  pro
     rata  basis  and any shortfall in the 2008 Cash Target will reduce  50%  of
     such payment on a pro rata basis; and

(b)  in  relation  to  the  year ending 28 February 2009, provided  the  pre-tax
     profit attributable to the Famous Discoveries business are greater than the
     pre-tax profits for the previous year, an earn-out payment of US$2,600,000,
     to  be  satisfied by the issue of Consideration Shares at the then  current
     market  price, will be made if the average pre-tax profits attributable  to
     the  Famous  Discoveries business for each year of the Earn-Out Period  are
     not  less  than US$1,000,000 (`Earn-Out Period Profit Target') and  if  the
     cash balance attributable to the Famous Discoveries business at 28 February
     2009 is not less than 25 per cent of the pre-tax profits for that year,  or
     such lesser percentage as the Vendors and the Company may agree (`2009 Cash
     Target').  Any shortfall in the Earn-Out Period Profit Target  will  reduce
     the  payment for the Earn-Out Period on a pro rata basis and any  shortfall
     in  the  2009  Cash Target will reduce 50% of such payment on  a  pro  rata
     basis. The payment made in respect of the year ending 28 February 2008 will
     be  deducted  from the payment to be made in respect of the  full  Earn-Out
     Period.

The  Consideration Shares will be subject to a lock-in until 30  September  2009
and  the Vendors have agreed that thereafter they will not dispose of more  than
one-third  of the Consideration Shares in any period of six-months. The  lock-in
is subject to certain exceptions, including:

(a)  in  respect of disposals required to raise cash to fund tax liabilities  of
     the Vendors arising from the acquisition; and

(b)  if  at  any  time prior to 30 September 2009 MediaXposure Limited  (Cayman)
     which,  prior to the acquisition, owned approximately 73% of the  Company's
     issued  share capital, transfers a proportion of its holding of  shares  in
     the  Company, the Vendors may transfer up to the same proportion  of  their
     Consideration Shares.

Under  the terms of the acquisition agreement, the Vendors have given warranties
and  representations in respect of certain business, taxation and other matters,
subject to agreed limitations on liability.

The  Vendors have each entered into new employment agreements with Reliant under
which  Akos  Jankura  and  Bill  Barlow  have  been  appointed  as  Senior  Vice
Presidents. The employment agreements are terminable by either party on 6 months
notice expiring not earlier than 28 February 2009. The terms of engagement  also
contain  provisions for early termination, inter alia, in the event of a  breach
of  duties. There are no provisions for benefits upon termination of employment.
The  remuneration  payable  under each agreement is US$200,000  per  annum  plus
bonus.


2 April 2007

For further enquiries contact:

Steven Goodman,
Executive Chairman, ResponzeTV PLC
+852 2295 1161

Paul Lockstone,
Edelman Financial, London
+44 (0)20 7344 1325



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