Another acquisition for THK:
Think Partnership Signs Letter of Intent to Acquire Litmus Media, Developer of Real-Time Click Fraud Detection and Order Abandonment Recovery Technologies
Monday December 19, 8:20 am ET
Litmus Media's profitable, rapidly growing marketing platform detects and protects against click fraud, increasing click-to- transaction conversion ratios and maximizing search marketing return on investment
NORTHBROOK, Ill.--(BUSINESS WIRE)--Dec. 19, 2005--CGI Holding Corporation, which plans to seek shareholder approval to change its name to Think Partnership Inc. ("THK") (AMEX:THK - News; the Company) today announced that the Company has entered into a letter of intent to acquire Litmus Media, Inc. ("Litmus"), which has developed and implemented revolutionary real-time "in the clickstream" click fraud detection and protection technology. By protecting advertisers on its ValidClick platform from click fraud, click-to-transaction conversion ratios are higher and therefore advertisers can justify paying a higher price per click, which in turn attracts website publishers to Litmus' profitable and rapidly growing ValidClick Network (http://www.validclick.com). Litmus has also developed and implemented a highly effective patent-pending abandoned shopping cart recovery technology called Second Bite, which has been demonstrated to increase sales for online retailers (http://www.litmusmedia.com).
The Company expects Litmus to add more than $4 million of pre-tax income to the Company during 2006. The letter of intent contemplates that THK will acquire Litmus for an upfront consideration of $6.5 million in cash and $6.5 million in common stock of the Company. The Litmus shareholders may also receive up to four earnout payments up to a maximum aggregate of $21 million, each half in cash and half in common stock of THK. The earnout payments will be contingent upon the aggregate pre-tax earnings of Litmus during the first 12 full calendar quarters following the Closing meeting specified targets. Closing of the transaction is subject to a number of conditions including a due diligence investigation and audit of Litmus, a financing contingency, Board of Director approvals, and other closing conditions.
Based in North Kansas City, Mo., Litmus has built click fraud protected advertising distribution technologies for the performance-based advertising, search marketing, and e-retailing industries. The ValidClick Network serves pay-per-click search advertising, local search advertising, shopping comparison and coupon content to over 1,000 search engines and web directories processing over 55 million searches per month. The company's real-time click fraud prevention technology and local keyword mapping algorithms allow Litmus to secure partnerships with tier-one search engines and paid content providers, and in turn, allows Litmus to provide higher revenues-per-click to search publishers.
Litmus has also leveraged its proprietary technologies to develop and operate a profitable portfolio of web properties including online yellow page services, leading local city directories, a meta-shopping search engine, product/coupon search sites, and an affinity-based web search engine. In the merchant solutions arena, Litmus provides merchants with a unique patent-pending order abandonment recovery technology, called Second Bite, and coupon/product feed distribution services, helping online retailers drastically increase ROI with little or no additional investment.
Litmus Media was founded in 1999 by Tobias Teeter when he launched the JumptoYourCity.com city guide network. Under his leadership and vision, the company has since launched many successful web properties, applications, and content distribution platforms that power thousands of leading search sites and online stores. Previously, Mr. Teeter was a corporate attorney and Director of ISP Relations for Adknowledge, Inc. a Kansas City-based online marketing company. Mr. Teeter is a member of the Missouri Bar and holds a B.S. degree in Insurance and Risk Management from Missouri State University, a J.D. from the University of Missouri School of Law, and attended the Missouri University MBA program.
Litmus President and General Counsel Tobias Teeter stated, "Our team is very excited about joining the Think Partnership family. Litmus Media's success is based on leveraging proprietary technologies to build superior ad distribution platforms. Joining Think Partnership gives Litmus the unique opportunity to combine and cross-apply technologies and networks with our sister companies to our mutual benefit, while allowing us to continue to operate in the entrepreneur-driven culture we thrive in."
Litmus Chief Executive Officer John Linden joined Teeter in early 2005. He developed the company's coupon and product comparison distribution systems and co-invented the click fraud detection technology for ValidClick. Prior to Litmus Media, he was the Executive Vice President of Marketing for Positive Networks, Inc., a leader in managed VPN services. He has also served as Chief Technology Officer for Adknowledge and Virtumundo, Inc., and co-invented several industry leading Internet marketing technologies. Mr. Linden started his Internet career in 1996 as the Founder and CEO of Planet Alumni, Inc. which later became Reunion.com.
Litmus CEO John Linden stated, "Joining Think Partnership was very attractive to us because of the natural partnership opportunities among the portfolio of companies. From our initial meeting with the Think management team, it was immediately apparent that the possibilities for growth were virtually endless."
Both Teeter and Linden will continue to run Litmus Media after the closing as General Counsel and CEO, respectively.
Think Partnership CEO Gerard M. Jacobs stated, "This is an extremely significant acquisition for Think Partnership. Click fraud is a major problem for the advertising clients of the search engines and affiliate marketing networks. Click fraud currently is only dealt with after-the-fact, on an ad hoc complaints-made basis; it's a very unsatisfactory, expensive situation for advertisers. Litmus Media's technology changes the game dramatically. It identifies fraudulent clicks in real-time - 'in the clickstream', so to speak - and makes sure that advertisers aren't charged for those clicks. This gives advertisers a huge incentive to use Litmus' technology platform and to pay more for Litmus' pre-screened legitimate click stream. These higher advertiser payouts, in turn, are immensely attractive to website publishers who want to participate in Litmus' ValidClick Network. Both web publishers and advertisers profit from the technology, which explains why Litmus is so profitable and growing so rapidly."
T. Benjamin Jennings, chairman of Think Partnership, added, "Toby Teeter and John Linden are long term interactive marketing experts that we are thrilled to have as part of our team. They are proven technology innovators, they know how to build out successful Internet business models, and they have a history of finding unique and ground breaking interactive advertising solutions."
Scott P. Mitchell, president of Think Partnership, stated, "While our competition is only focusing on automating paid search marketing, we are recognizing the need to add value to our paid search service through introducing value-added technologies that aim to maximize paid search return on investment. The combination of Web Diversity's paid search marketing and bid management automation tools and technologies, Crystal Semantics' patented contextual search technology, and Litmus Media's differentiating technologies proven to significantly increase conversion rates and virtually eliminate click fraud, will provide Think Partnership with a world-class service offering, strengthening THK's ability to realize our strategy of becoming the world's most comprehensive, service-valued, interactive advertising company. The integration of these technologies into our existing operating companies - especially our affiliate marketing companies, PrimaryAds and KowaBunga, and our search engine optimization company, WebSourced - will be a top priority for us in 2006."
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