THK has signed a letter of intent to acquire PrimaryAds., Inc. The acquisition is expected to be accretive to the earnings of THK.
biz.yahoo.com
CGI Holding Corporation Signs Letter of Intent to Acquire PrimaryAds, a Leading Affiliate Marketing Company
Tuesday March 8, 8:40 am ET
Accretive Acquisition Will Broaden Company's Existing Online Marketing and Advertising Presence
LAKE BLUFF, Ill.--(BUSINESS WIRE)--March 8, 2005-- CGI Holding Corporation, which plans to seek shareholder approval to change its name to Think Partnership Inc. (AMEX: THK - News; "Company"), today announced that the Company has entered into a letter of intent to merge, through a wholly-owned subsidiary, with privately-held PrimaryAds Inc. ("PrimaryAds"). Located in North Plainfield, New Jersey, PrimaryAds is a leading provider of affiliate marketing services that connects website publishers with online advertisers.
The Company intends to acquire all of the stock of PrimaryAds in exchange for $10 million in cash. The shareholders of PrimaryAds can also earn up to $3 million in additional cash and up to $13 million of common stock of the Company, contingent upon the aggregate pre-tax income of PrimaryAds during the first twelve full calendar quarters following the closing of the merger achieving levels ranging from $6.5 million to $20 million. The Company also plans to issue to stockholders and employees of PrimaryAds options to purchase an undisclosed number of shares of common stock of the Company. The merger is expected to be immediately accretive to the earnings of CGI Holding Corporation.
The closing of the proposed transaction is subject to the satisfaction of a number of conditions, including the completion of due diligence, the completion of an audit of PrimaryAds, the execution of mutually acceptable definitive documentation, Board of Director approvals, and other customary conditions.
Gerard M. Jacobs, the Company's CEO, stated, "Think Partnership is excited to announce our entrance into affiliate marketing, which is one of our primary expansion targets for 2005. Ken Harlan and his team will be tremendous partners for us in this extremely important online marketing and advertising space. We expect that, at its current run rate, PrimaryAds will add $4 million or more to our annual pre-tax income, and therefore we expect that the shareholders of PrimaryAds will earn most if not all of the $16 million earnout portion of the merger consideration."
Scott Mitchell, the CEO of the Company's Cherish subsidiary, stated, "Think Partnership is positioned to benefit greatly from the digital Renaissance occurring around us due to the Internet: our WebSourced subsidiary is already the worldwide leader in search engine optimization, our Cherish subsidiary is a leader in online dating and relationship websites, and now PrimaryAds will make us a leader in affiliate marketing. Our internal growth in these businesses, combined with other acquisitions that we expect to announce during the next few months, will significantly expand our online advertising and marketing presence, and in selected online verticals."
Steven "Pat" Martin, the CEO of the Company's WebSourced subsidiary, added, "Affiliate marketing continues to be one of the fastest growing revenue generating channels for companies of all sizes. This partnership provides a unique opportunity for WebSourced's clients to take advantage of one of the leading affiliate marketing service providers while allowing PrimaryAds' clients to benefit from our world-class search marketing services."
Ken Harlan, the CEO of PrimaryAds, stated, "After carefully considering all of the many options available to us, we have decided to join Think Partnership Inc. This merger will allow our business to continue its rapid growth, without any disruptions, as part of a collaborative partnership of profitable online and offline advertising and marketing businesses."
This transaction was initiated and negotiated by Cherie Homa of KPMG Corporate Finance LLC.
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