THK has signed a second letter of intent to sell its Cherish division to MWXI. The original letter of intent, which was signed on March 22, 2006, has expired. The deal is still contingent upon the fulfillment of some significant contingencies on the part of MWXI.
Think Partnership Enters into Letter of Intent to Sell Dating Business
Friday November 10, 8:45 am ET
Sale to Enable Think Partnership to Redeploy Capital and Sharpen Focus on Core Interactive Performance-Based Marketing Services
CLEARWATER, Fla.--(BUSINESS WIRE)--Think Partnership Inc. ("Think") (AMEX: THK - News), an international leader in interactive performance-based marketing and related Internet technologies, today announced a new letter of intent to sell its dating businesses to Mountains West Exploration Inc. ("MWXI"). The previous letter of intent to sell the dating businesses to MWXI, issued March 22, 2006, had expired.
The sale includes Think Partnership's wholly-owned online dating subsidiary Cherish, Inc. and other direct and indirect subsidiaries that comprise nearly all of the Think Consumer market segment, including Personals Plus, Inc. and Vintacom Florida, Inc. (collectively, "Cherish").
If consummated under the proposed terms, MWXI would pay an aggregate of $21 million, payable as: $5 million in cash; a secured promissory note in the initial amount of $13 million; and unregistered common stock of MWXI valued at $3 million (the "MWXI Shares"). The promissory note would bear a 7% interest rate and be payable in 12 monthly installments commencing July 1, 2007. The aggregate purchase price would be subject to a downward adjustment of up to $6 million depending upon the 2007 EBITDA performance of Cherish. In the event of an adjustment, Think may elect to return some or all of the MWXI Shares at their initial valuation before the principal of the note would be reduced.
The companies comprising Cherish were acquired by Think over the last 30 months, for an aggregate of $8.5 million in cash, $9 million in Think Partnership common stock, and $1.2 million in notes, or a total value of $18.7 million. MWXI will assume all of the contingent obligations of Think in regard to any earn-out obligations or other payments owed to the former shareholders of Cherish. In addition, MWXI and Think will enter into a mutually acceptable agreement for Think to provide certain services to MWXI.
Assuming completion, Scott P. Mitchell, president and CEO of Think Partnership, will become chairman of MWXI's board of directors. Think will also have the right to appoint the majority of MXWI's board of directors until the promissory note has been paid in full, the MWXI Shares have been registered with the SEC, and Think is no longer the largest stockholder of MWXI. MWXI will change its name to better reflect the business of online dating and personal networking.
"Selling our dating business to Mountains West creates an ideal outcome for both parties," said Mitchell. "Cherish will operate under Mountains West's management team that looks to focus its efforts exclusively on the dating sector, while the deal structure allows Think Partnership to retain the benefits of ownership and leadership of this profitable business. More importantly, it enables us to redeploy capital and sharpen our focus on Think's higher-margin and faster-growing business of interactive performance-based marketing and related technologies."
"Mountains West sees great opportunity in the Cherish businesses," said Douglas Stukel, chairman of Mountains West. "It offers Mountains West a strong foundation and direction in entering this business segment, and we plan to aggressively look for acquisitions in the online as well as the offline dating industry."
Think does not provide any assurance that this proposed transaction will be completed within the 90 days contemplated by the letter of intent or at all. Closing of the transaction is subject to a number of conditions including, among others, MWXI's ability to finance the cash portion of the purchase price. The transaction is also subject to Think's satisfactory due diligence of MWXI, MWXI's satisfactory due diligence of the companies being sold, the negotiation and execution of definitive agreements, the receipt of all required consents, and MWXI and Think board of director approvals. Given that MWXI is currently controlled by individuals who are shareholders of Think and who are actively involved in certain other business transactions and companies with members of Think's management and board of directors, before closing of the transaction, Think will require an appropriate legal opinion from its counsel, along with an opinion from a qualified independent investment bank, regarding the fairness of the terms and conditions of the transaction to Think's shareholders.
<snip>
biz.yahoo.com |
