ZoomerMedia Limited Completes Acquisition of Television Stations, Radio
Stations, Office Building and Other Media Assets Assisted by $17.6
Million Private Placement with Fairfax Financial Holdings Limited
Source: ZoomerMedia
TORONTO, ONTARIO--(Marketwire - June 30, 2010) - ZoomerMedia Limited (TSX VENTURE:ZUM) ("ZoomerMedia") is pleased to announce the completion of the acquisition of the business and undertakings of Vision TV: Canada's Faith Network/ Réseau Religieux Canadien, the acquisition of MZ Media Inc. and its radio stations, the acquisition of other complementary companies and the acquisition of a commercial property to house the new combined ZoomerMedia. Concurrently, ZoomerMedia closed a $17.6 million private placement with Fairfax Financial Holdings Limited ("Fairfax").
Said Moses Znaimer, President and CEO of ZoomerMedia Limited, "The VisionTV group of channels deliver unique and original programming to the millions of Canadians interested in spirituality, wellness and personal growth. Joining the ZoomerMedia family of radio, magazine and web properties devoted to the 45plus will ensure that they are able to continue fulfilling this unique mission. It will create new benefits and synergies, and will position the channels to prevail in the face of technological and regulatory change."
Said Bill Roberts, President and CEO of VisionTV, "Viewers 45plus represent VisionTV's core audience, making it a natural complement to ZoomerMedia's existing media properties and opening up new opportunities for cross-platform promotion. In addition, ZoomerMedia and VisionTV share a strong commitment to diversity and high-quality Canadian content. This transaction creates an important new independent voice in Canadian broadcasting. There are almost none left."
Said George Grant, President and CEO of MZ Media Inc., "Just a short time ago, we were only radio. Now, we're a united and unique multi-platform organization that can offer advertisers comprehensive national marketing programs for the 45plus. If you want to grow your business, I recommend taking a closer look at reaching this demographic that has the wealth, and the time to spend it."
Said Dale Godsoe, Chair of the Board of Directors of the former owners of the business and undertakings of VisionTV, "We are excited to begin the process of re-inventing and re-energizing the VTV Charity, and to explore new strategies of fulfilling its mandate to deliver interfaith and diversity-oriented content".
Details of the transactions include the acquisition by ZoomerMedia of the following assets:
from VisionTV: Canada's Faith Network/Réseau Religieux Canadien, Zoomer acquired (the "Vision Assets"):
(a) the assets and undertakings of the business of VTV used exclusively and predominantly in connection with VTV's ownership and operation of the Canadian specialty television programming service known as and operating under the name "VisionTV";
(b) all of the issued and outstanding shares in the capital of Christian Channel Inc. ("CCI") owned by VTV, with the primary assets owned by CCI being the CRTC licenses for the television programming undertakings CHNU- TV Fraser Valley and CIIT-TV Winnipeg, also known respectively as "Joytv 10" and "Joytv 11"; and
(c) all of the issued and outstanding shares in the capital of Vision TV Digital Inc. ("VTVDI") owned by VTV, with the primary asset owned by VTVDI being its 47.22% ownership interest in ONE: The Body Mind and Spirit Channel Inc., being the holder of the CRTC license for an English language Category 1 specialty television service known as ONE: The Body Mind and Spirit Channel ("ONE");
and from Zoomer's President, Chief Executive Officer and majority shareholder, Moses Znaimer, Zoomer acquired (the "MZ Assets"):
(d) all of the issued and outstanding shares in the capital of MZMedia Inc. ("MZMI"), with the primary assets of MZMI being the CRTC licenses for the radio undertakings CFMZ-FM, The New Classical 96.3 FM and 103.1 FM and CFZM, Zoomer Radio AM740;
(e) all of the issued and outstanding shares in the capital of MZTV Production and Distribution Inc. ("MZTV P&D"), with the primary assets of MZTV P&D being a television production and distribution business;
(f) all of the issued and outstanding shares in the capital of Zoomer Management Limited ("Zoomer2"), with the primary assets of Zoomer2 being the management services operation providing creative, production, communications and financial administration services to a variety of companies;
(g) all of the assets and undertakings of the business used exclusively and predominantly in connection with the operation of the annual Canadian conference known as and operating under the name "ideaCity"; and
(h) an office building situated on 2.6 acres of commercial property in downtown Toronto, known municipally as 64 Jefferson Avenue, Toronto Ontario.
Zoomer purchased the Vision TV Assets for an aggregate purchase price of $25 million. The purchase price was paid at closing through the payment to VTV of $14 million in cash and $11 million by way of a promissory note payable over 10 years at an interest rate of 7% per annum in blended monthly payments.
Zoomer acquired the MZ Assets for an aggregate purchase price of $30 million. The purchase price was paid at closing through the issuance to Moses Znaimer and Olympus Management Limited ("OML"), a company controlled by Moses Znaimer, of 250,000,000 non-voting Series 2 Class A Preference Shares (the "Series 2 Shares"), all issued at a price of $0.10 per share, and cash consideration of $5,002,255.31. Contemporaneously, at the time of closing, OML exercised warrants to acquire 20 million common shares of Zoomer at a price of $0.10 per share (an aggregate of $2 million) and OML subscribed by way of private placement for 4,094,970 common shares of Zoomer and 5,905,030 Series 2 Shares at a price of $0.10 per share (an aggregate of $1 million).
Zoomer also completed today a private placement with Fairfax (95 Wellington Street West, Suite 800, Toronto Ontario M5J 2N7) pursuant to which Fairfax purchased 44,025,901 common shares and 131,974,099 non-voting Series 1 Class A Preference Shares (the "Series 1 Shares). All of the shares were issued by Zoomer at an issue price of $0.10 per share for an aggregate price of $17.6 million. The common shares and Series 1 Shares were acquired by Fairfax on the basis of an "accredited investor" exemption under National Instrument 45-106 – Prospectus and Registration Exemptions. Fairfax acquired the common shares and Series 1 Shares for investment purposes. Fairfax continually reviews its investment alternatives and may purchase additional common shares or Series 1 Shares of Zoomer from time to time in accordance with applicable laws.
All Class A Preference Shares are non-voting and the holders of the Class A Preference Shares on any distribution of assets of Zoomer among its shareholders for the purpose of winding up its affairs, shall be entitled to receive from the assets and property of Zoomer for each Class A Preference Share (with all series within the class treated equally) held by the holder $0.10 plus all declared and unpaid dividends thereon, before any amount shall be paid or any property or assets of Zoomer distributed to the holders of the common shares. The Series 1 Shares can be exchanged at the option of Fairfax or Zoomer into common shares of Zoomer at any time provided that upon such conversion Zoomer will continue to satisfy the requirements of the CRTC relating to foreign ownership. The Series 2 Shares can be exchanged at the option of Moses Znaimer, OML or Zoomer into common shares of Zoomer at any time provided that upon such conversion Zoomer will continue to satisfy the public float share distribution requirements of the TSX Venture Exchange. Each Class A Preference Share is exchangeable into 1 common share of Zoomer.
Moses Znaimer now controls 165,157,970 common shares of Zoomer, representing 66.27% of the outstanding common shares and 255,905,030 Series 2 Shares, representing 65.98% of the outstanding Class A Preference Shares. Fairfax now owns 44,025,901 common shares of Zoomer representing 17.67% of the outstanding common shares and 131,974,099 Series 1 Shares, representing 34.02% of the outstanding Class A Preference Shares.
About VisionTV
VisionTV launched in September 1988 and is available as a "basic" service in over 9 million cable and satellite subscriber homes across Canada. It is licensed as Canada's only multi-faith specialty television service and presents inspirational, insightful and original programming that celebrates diversity and promotes understanding among people of different faiths and cultures. VisionTV ranks among the country's top 25 specialty channels in audience, attracting 1.6 million viewers each week. The VisionTV viewer demographic trends towards the 45plus age group.
About ONE: the Body, Mind & Spirit Channel
One is a digital television service offering programs on exercise, meditation, yoga, natural health, and living a planet-friendly lifestyle. The schedule includes progressive programming from Canada and around the world on new ideas and intriguing possibilities for recharging life and reaching maximum personal potential and spiritual health.
VTVDI owns 47.22% of One and is the managing shareholder with full responsibility for all operations and management of the channel. Other equity partners are 4437471 Canada Inc. (a CW Media Inc. company), RNC Média Inc. and Renewal Partners Company.
About Joytv
Joytv 10 in Vancouver and Joytv 11 in Winnipeg were most recently operated as Rogers- owned Omni stations. Both commercial channels were acquired by the Vision group in May, 2008. The Joytv stations are over the air conventional stations, available over-the- air and on cable to all television homes in their respective markets. In the case of Joytv 10 this includes Vancouver, Victoria and the Fraser Valley and in the case of Joytv 11 it includes the greater Winnipeg area. The Joytv stations are also carried in Ontario on Rogers Digital. These channels are dedicated to delivering uplifting and entertaining programming to viewers of all ages.
About ZoomerMedia Limited
In addition to the new acquisitions, Zoomer already publishes Zoomer Magazine, the largest paid circulation magazine in Canada for the mature market. Published nine times a year, Zoomer Magazine has a paid circulation of approximately 180,000 and places a further 25,000 copies on newsstands.
Zoomer also derives royalty revenue through the provision of exclusive marketing and membership services to CARP, A New Vision of Aging for Canada.
Zoomer is also Canada's leading provider of online content targeting the 45plus age group. Its portfolio of websites and electronic newsletters delivers over 2 million page per views per month. The key property is www.50plus.com, which offers a wide range of information, entertainment, community connection (forums, dating, blogs) and commerce together with four electronic newsletters (health, money, travel, lifestyle), each of which has over 120,000 opt-in subscribers.
Zoomer also produces and manages www.carp.ca, the online home of CARP. With approximately 350,000 members, CARP is Canada's largest association for the 45plus. Zoomer also produces CARP Action Online, an electronic newsletter for CARP members.
About MZ Media Inc.
MZMI operates CFMZ-FM Toronto – The New Classical 96.3FM, CFMX-FM Cobourg – The New Classical 103.1FM and CFZM-AM 740 Toronto – The New AM 740 – Zoomer Radio that all have a target audience of adults 45plus. The New Classical 96.3 FM and 103.1 FM are the only commercial all-classical radio stations in English Canada and have a market share of 5.1 of the Greater Toronto Area (GTA). The New AM 740 – Zoomer Radio, the last music service left on the AM dial in the GTA, has a market share of 2.5 for a combined market share of 7.6 for the three months ended March 31, 2010. MZMI also operates two websites related to the radio properties, www.classical963fm.com and www.zoomerradio.ca.
About MZTV Production and Distribution Inc.
MZTV P&D is a television production and distribution business that provides television and video production services to various clients. MZTV P&D also produces the television programs "Beautiful Little Classics" that is aired on One: the Body, Mind & Spirit channel and "ideaCity" that is aired on both VisionTV and One: the Body, Mind & Spirit channel.
About ideaCity
ideaCity is a annual Canadian conference also known as 'Canada's Premiere Meeting of the Minds', bringing together an eclectic gathering of artists, adventurers, authors, cosmologists, doctors, designers, entertainers, filmmakers, inventors, magicians, musicians, scientists and technologists to speak to a highly engaged audience.
About Zoomer Management Limited
Zoomer Management Limited is a management services company that provides creative, production, communications and financial administration services to a variety of companies.
Cautionary note on forward looking statements
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Certain statements made in this report are 'forward-looking statements' which may include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words 'believe', 'anticipate', 'expect', 'estimate', 'project', 'will be', 'will continue', 'will likely result' or similar words or phrases. Forward-looking statements involve risks and uncertainties, which may cause actual results to differ materially from the forward-looking statements. The risks and uncertainties are detailed from time to time in filings by ZoomerMedia Limited with provincial securities commissions. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Such risks, uncertainties and other factors include, but are not limited to, the following:
* the risks inherent in magazine publishing generally;
* the risks inherent in the operation of Internet media properties generally;
* the risks inherent in the operation of television broadcast properties
* the risks inherent in the operation of radio broadcast properties
* the competition within the media industry for the baby boom generation's business;
* the risks associated with governmental regulation of the publishing, internet, radio broadcasting and television broadcasting businesses;
* the results of legal claims made by or against the Company;
* the risk of managing the current revenue growth rate;
* the dependence of the business on the continuing operation of its computer systems; and
* the dependence on key personnel.
Given these risks, and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. ZoomerMedia Limited does not intend and does not assume any obligation to update these forward-looking statements.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
For more information, please contact
ZoomerMedia Limited
Leanne Wright
Vice President Communications
416-886-6873
leanne@zoomer.ca
© ZoomerMedia
