CDbeat.com and Cakewalk LLC (32 Records) Sign Definitive Agreement for Business Combination
Combined Company to Pursue Internet Technology/Entertainment Content Strategy
STAMFORD, Conn., Nov. 1 /PRNewswire/ -- CDbeat.com, Inc. (OTC Bulletin Board: CDBT - news), the developer of proprietary Internet software, and Cakewalk LLC, one of the country's leading independent music companies, today announced the signing of a definitive agreement for a business combination. Pursuant thereto, CDbeat will acquire all of Cakewalk's assets, subject to Cakewalk's liabilities, in exchange for the issuance of CDbeat shares to Cakewalk's investors. The combination of CDbeat and Cakewalk will create a marriage of Internet technology and entertainment-related content. It is anticipated that the transaction will close on or about November 5, 1999.
Robert Miller, Cakewalk's President and CEO, will become President and CEO of the combined company. Joel Arberman, CDbeat's President and CEO, will become Internet Officer and a director of the combined company. Upon consummation of the transaction there will be a total of 19,547,730 shares outstanding, allocated 10%/90% between CDbeat's existing shareholders and Cakewalk's investors. CDbeat will retain its public company status, and all existing shares of CDbeat held by nonaffiliates will remain outstanding following the transaction.
CDbeat's proprietary, patentable, free disc/digital file recognition software has the capability of allowing users who play ordinary music CDs, MP3 files, DVDs or CD-ROMs in their computer the option of being connected simultaneously to pre-selected Internet sites related to that particular artist (i.e., record/film company home pages, artist home pages, fan club sites, online stores, etc.). CDbeat's software thus functions like an efficient search engine, offering users a dynamic multimedia experience.
The combined company will offer to its customers (i.e., record companies, film companies, media player companies, etc.) a unique marketing capability (along with a database on the users), since customers will be referred true fans of each artist. As a result, CDbeat's services are entirely complementary -- rather than competitive -- with the customer's business.
The combined company further intends to acquire various forms of proprietary content, including music and film libraries and catalogs, celebrity Internet sites, educational and medical resources, etc., which it will offer to its customers. This proprietary content, along with CDbeat's software capability, will afford customers of the combined company a unique combination of products and services.
``This transaction will combine CDbeat.com's cutting-edge proprietary Internet software with Cakewalk's unparalleled content orientation. The marriage of technology and content will create an Internet company unlike any other that exists today', said Joel Arberman.
Robert Miller added: ``Since its formation three years ago, Cakewalk has developed a successful content-based business infused with a rigorous cash- flow oriented philosophy. That is why we have been able to attract such prominent investors as senior partners of Lazard Freres; BankBoston; and Prudential Insurance/Entertainment Finance, Inc. We believe that the combination with CDbeat will enable the combined company to offer a completely unique service to its customers.'
About CDbeat and Cakewalk
CDbeat users can download free software from cdbeat.com. CDbeat recently went public in a direct participation offering.
Cakewalk is one of the country's leading independent music companies specializing in the catalog, or reissue, segment of the record business. Operating as 32 Records and related ``32' labels (e.g., 32 Jazz, 32 Pop, 32 Blues), Cakewalk has acquired approximately 1,000 master recordings by artists such as Judy Garland, Tom Jones, Jose Feliciano, Ike & Tina Turner, Ella Fitzgerald, Charles Mingus and Louis Armstrong. Cakewalk recompiles, repackages, remarkets and sells its music products into various domestic and international markets.
Since 1997, Cakewalk has released in excess of 150 titles from its music library, including the renowned ``Jazz For...' compilation series. This series, currently consisting of six releases, combines a lifestyle/sensual feel with traditional yet easy-listening jazz. The series has topped the Billboard Jazz charts for the past ten months. In June 1999, 32 Jazz was recognized by Billboard as both the Number One jazz label and jazz imprint for the first six months of 1999. For the year ended December 31, 1998, Cakewalk had consolidated revenues of approximately $4.2 million.
Following the closing of the transaction with CDbeat, it is intended that 32 Records will become a wholly owned subsidiary.
Safe Harbor statement under the Private Securities Litigation Reform Act of 1995.
This press release contains forward-looking statements relating to future performance, technology and product development that may impact future results and the future viability of the company. Actual results could be affected or differ materially from those projected in the forward-looking statements as a result of risk factors such as: future products and results; management of potential growth; risk of system interruption; technological shifts; potential technical difficulties that could delay new products; competition; general economic conditions in the markets in which the company operates; the ability of the company, its customers, and suppliers to become Year 2000 compliant; pricing pressures; and the uncertainty of market acceptance of new products by OEM's and end-user customers. More information about factors that potentially could affect CDbeat.com's financial results is included in CDbeat.com's filings with the Securities and Exchange Commission.
CDbeat, CDbeat.com, CDbeat Entertainment Center, Virtual Fan Clubs and VFC are either registered trademarks or trademarks of CDbeat.com, Inc., or its affiliates. All other names mentioned herein may be trademarks of their respective owners |
