Mood Media Corporation has signed an agreement to acquire US-based multi-sensory branding service provider DMX Holdings, Inc. for US$86.1 million in cash including net debt repaid on closing, subject to certain adjustments for working capital. The equity value of the transaction will be approximately US$53.8 million.
In order to satisfy the consideration payable in connection with the DMX acquisition, Mood Media has today entered into placing agreements in Canada and the UK to complete a private placement of 31,800,000 common shares, to be issued at 231 pence per common share (C$3.60 per common share) raising £73.5 million (C$114.5 million) before expenses. The additional net proceeds of the private placement will be used for general corporate purposes.
Both the DMX acquisition and the private placement are subject to the satisfaction of various regulatory and other conditions, including admission of the common shares to be issued under the private placement to trading on AIM, the Placing Agreements becoming unconditional (save as to Admission) and Admission. The Placing Agreements contain rights under which they can be terminated for a breach of warranty up to Admission and are also subject to Admission having occurred by 8.00 a.m. on March 20, 2012 (or such later date not being later than March 27, 2012 as may be agreed between the parties). Mood Media anticipates the closing of both the DMX acquisition and the private placement will occur in March 2012.
DMX uses music, video and digital signage, messaging, scent, and audio/visual systems to personify and enhance brands to create lasting connections that encourage customer loyalty, delivering services to over 100, 000 locations. In the 12 months ended 31 December 2011, DMX recorded revenues of US$84.6 million, EBITDA of US$16.5 million and profit before taxation of US$5.6 million.
The common shares to be issued pursuant to the private placement have been conditionally approved for listing on the Toronto Stock Exchange, subject to satisfaction of the exchange’s customary conditions.
Application has been made to the London Stock Exchange for Admission of the common shares to be issued pursuant to the private placement, which will rank pari passu in all respects with the existing common shares. It is expected that Admission will become effective and that dealings in the new common shares on AIM will become effective on March 20, 2012.