Acquisition

RNS Number:3427Y
Virtue Broadcasting PLC
06 May 2004


Embargoed Release: 07:00hrs Thursday 6th May 2004


                            Virtue Broadcasting Plc

                           ('Virtue' or the 'Group')

                   Acquisition of Foroso Communications GmbH

Virtue Broadcasting Plc, Europe's leading online corporate communications group,
is delighted to announce the acquisition of Foroso Communications GmbH
('Foroso'), a high quality Web conferencing company based in Germany. Virtue
will pay a total consideration of up to #1,280,000 subject to Foroso achieving
certain conditions including earning #600,000 profit after taxation for the
period from acquisition until 31 December 2005.

Established in 2002, Foroso is a technology leader in the provision of rich
media conferencing services that enable greater productivity and increased
flexibility across large corporations. Foroso provides carrier class application
services that integrate Voice, Voice over IP and Data to offer real time
collaboration across multiple locations and platforms. Its unique selling point
('USP') is focus on excellent product usability, accessibility and integration
capabilities. Foroso's product is built on open WebServices standards including
SOAP and XML which will be extended to SIP. It requires no client software
installation or firewall configuration. Foroso's products are currently used by
customers such as Bayer, Fujitsu and Merck Sharp & Dohme.

The acquisition of Foroso represents the successful start of the second stage of
the Board's strategy to build Europe's leading online corporate communications
company. The Board shares the view of many leading analysts that the market is
moving toward a single, converged, IP based voice-video-data network, with
research showing that the worldwide Web conferencing market segment set to grow
by 73% per annum to USD1.1 billion by 2006 (source: The Radicati Group, Inc.
October 2003).

This acquisition will enable the enlarged Group to be the integrated webcasting
and rich media conferencing service provider of choice for Europe's
corporations, providing IP communication solutions from very large one-to-many
communication events to very small few-to-few collaborative meetings, and to
exploit cross-selling opportunities that exist across its current blue chip
customer base. This will increase the company's ability to drive higher gross
margins from superior products, which have significant longevity and
attractiveness.

Audited financial statements of Foroso for the year ended 31 December 2003 show
revenue of Euro279,000 and loss before tax of Euro14,000. Net liabilities at that date
were Euro23,000.
Virtue has paid initial cash consideration of #520,000. Deferred cash
consideration of #40,000 is payable on 5 November 2004 and #120,000 is payable
on 5 May 2005. Subject to the achievement of agreed performance targets, a
further cash payment of #600,000 may be payable between 31 December 2004 and 31
December 2005. In order for the vendors to receive the full earn out
consideration, Foroso will need to achieve: profit after taxation of #600,000 or
revenues of #1.0 million in the period from the date of acquisition until 31
December 2005 or in addition the bid price of Virtue shares to average 10.0
pence per share over a 2 month period from today until 31 December 2005.

In addition, the vendors have been granted an option to subscribe for a limited
number of ordinary shares in Virtue in the event that the Group is acquired by a
third party. The number of options will enable the vendors to participate on a
graduated scale in any excess over the Company's current market capitalisation
less the initial consideration paid.

Franz Buchenberger (aged 44) has joined the management team of Virtue. Franz has
20 years experience within the IT and software product market and prior to
establishing Foroso was the CEO of Blaxxun Interactive a leading international
internet company for 6 years and prior to that was with BMW's software division
Softlab.

Mike Neville, Chairman, commented:

"I am delighted with the acquisition of Foroso, as I feel it is not only
complementary in terms of technology, but also repositions the business clearly
within the IP services market, which is tremendously exciting. It is also
another significant step in Virtue's evolution, and one, which I am very proud
to be associated with".

ENDS

For further information please contact:

Virtue Broadcasting Plc
James Ormondroyd, Finance Director
Tel: [phone]

Foroso Communications GmbH
Franz Buchenberger, CEO & President
Tel: [phone]



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