Acquisition
October 08 2003 - 2:25AM
UK Regulatory
RNS Number:6457Q
Air Music & Media Group PLC
08 October 2003
8 October 2003
Air Music & Media acquires the Original Record Company Ltd
Air Music & Media Group plc ("Air Music" or "the Company"), a leading UK
producer and supplier of low-priced entertainment products to the international
market, announces that it has acquired the Original Record Company Ltd
("Original"). Original trades as New Sound 2000, the low price CD label.
The acquisition will be for a maximum consideration of #3 million, comprising
an initial payment of #550,000, of which, #175,000 will be in cash and the
balance will be satisfied by the issue of 4,604,616 Air Music ordinary shares at
a price of 8.144p each. Further annual payments may be made depending on the
profit-after-tax attributable to Original, for the financial periods ending 2004
and 2005. Subsequent payments will be in loan notes and/or shares, at Air
Music's option. In accordance with Air Music's stated acquisition policy,
Original is expected to be earnings per share enhancing.
The New Sound 2000 label is a strong brand in the budget CD market and is a
direct competitor of Air Music's existing Going For A Song label. It will
bring new customers, licences and distribution channels to the Company and will
provide significant opportunities for the exploitation of Company owned
copyrights. New Sound 2000's sales function will continue to trade from its
existing offices, while its logistics and finance functions will be integrated
into Air Music's. New Sound 2000's sales have grown from #1.3 million in 2001
to #3.1 million in 2003 and it is expected that sales levels will be maintained
at 2003 levels, with growth potential.
Commenting, John French, Chairman of Air Music, said: "The acquisition of the
New Sound 2000 label strengthens Air Music's position at the forefront of the
low price entertainment market. It provides us with another strong CD label,
additional routes to market for our existing products, including DVDs from our
subsidiary, Hollywood DVD, which we acquired in December 2002, and further
licenses which we can cross sell through our other international businesses.
We will continue to look for additional acquisitions in the UK and abroad that
will be both earnings enhancing and improve shareholder value."
For further information:
Air Music & Media
John French, Chairman 07836 722482
Mark Frey, Chief Executive 01442 877 018
mj2 ltd
Richard Sunderland 020 7491 7789
Seymour Pierce Limited
Mark Percy, Ewan Leggat 020 7107 8000
Notes to editors
Air Music & Media is a manufacturer and distributor of value CDs and DVDs. Its
products have an established customer base and are therefore less exposed to the
risk associated with the often fickle, fashion-led area of the entertainment
market.
The Company moved from Ofex to AIM in July 2002 and at its most recent results
(for the year ended 31st March 2003) turnover improved 83% to #8,032,035
(2002: #4,374,373) whilst profit before tax, interest and goodwill amortisation
increased 33% to #1,127,473 (2002: #847,968).
In 2001, Air Music & Media acquired the Canadian company Legacy Entertainment
Inc, which provided an increased catalogue of audio products and opportunities
for cross selling with existing catalogues, as well as an important foothold in
the North American market. This was followed, in December 2002, by the
acquisition of the UK based company, Hollywood DVD, a leading manufacturer and
distributor of low priced DVDs. The management believes that the DVD market
affords a huge opportunity and the acquisition is the first stage in Air Music
& Media's strategy to diversify from being a pure audio business to that of a
manufacturer, distributor and licence holder of a broad range of entertainment
products.
Air Music & Media now operates in 55 countries and continues to look for suitable
acquisitions.
This information is provided by RNS
The company news service from the London Stock Exchange
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