Attention Business Editors:
Signature Brands Limited finalizes agreement to acquire CD
Plus.com Inc.
TORONTO, May 17 /CNW/ - Signature Brands Limited is pleased to announce
that it has signed today a definitive agreement to acquire CD Plus.com Inc.
The deal is subject to the completion of due diligence by both sides as well
as the approval of the Toronto Stock Exchange and shareholders of Signature
Brands Limited. We expect to convene an annual and special meeting of
shareholders by the end of June. Signature will acquire CD Plus.com by issuing
approximately 250,000,000 shares to the current shareholders of CD Plus.com.
Subject to adjustments, the final agreement will result in current
Signature shareholders holding about 8.5% of the equity of the Company. The
final agreement on the appropriate number of shares to be issued was
influenced by the final adjustments in the sale of Signature's food business
to Weston Foods which reduced the cash value of Signature Brands Limited.
About CD Plus.com Inc.
CD Plus.com operates a Canada-wide network of pre-recorded music retail
stores in secondary markets across the country. Currently, the Company
operates 102 stores nation wide under several trade names including CD Plus,
AVE Entertainment, Music Baron and Music City. The Company also operates
Canada's leading music retailing Internet site, www.cdplus.com, which it
acquired in December 1998 as part of the acquisition of the 10-store CD Plus
retail chain. The distribution and warehousing facilities are in Winnipeg,
North Bay and Toronto.
CD Plus.com's Internet site has been in operation for over three years
and offers customers national reach and support through the Company's cross
Canada retail chain. CD Plus.com management is committed to the growth and
expansion of the Internet sales channel and has entered into marketing
arrangements with AOL Canada, Canada.com, BID.COM, Sprint Canada, and
Altavista.ca (as a part of the Double Click network) and is currently
negotiating additional agreements with several other marketing and content
partners.
CD Plus.com is one of the five largest music retailing chains in Canada.
The Company was established in 1992, when the principal shareholder acquired
Rock Entertainment Accessories Inc., then a regional chain of music stores in
Northern Ontario. From 1992 to 1999, the Company grew through acquisitions,
from a small regional chain of 12 stores to its current size of 102 locations
across Canada. The Company has focused and continues to focus on those
communities where ideally it does not compete with other national music
retailing chains.
The Company intends to continue its expansion and growth as a leading
multi-channel Canadian music retailer through internal growth, acquisitions
and penetration into new channels of distribution. As part of this strategy,
the Company has signed a letter of intent to purchase Urban Sound Exchange
which, with 10 corporate stores, 7 franchised locations, and the Internet web
site www.urbansound.com, all specializing in the sale of ''USED'' music, will
serve as the basis for the Company's growth across this growing market sector.
The Company has engaged First Marathon, to undertake on a best efforts
agency basis, an equity financing of up to $10,000,000.
Shown below is a summary of CD Plus.com's financial results up to
December 31, 1998. These results do not include the results of the 10 CD Plus
stores acquired December 24, 1998 which generated sales of over $10 million
during the 1998 calendar year.
<<
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(000's of $) 9 Months Ended Dec. 31 Years Ended March 31
1998 1997 1998 1997
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Income Statement
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Sales 39,183 36,936 46,050 29,327
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Gross Margin 12,716 11,948 15,239 9,999
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EBITDA 2,618 2,479 2,444 942
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EBIT 2,206 2,152 1,902 634
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EBT 1,874 1,905 1,473 409
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Net Income 1,046 1,534 1,073 409
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Balance Sheet
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Working Capital 5,571 1,186 5,621 7,002
-------------------------------------------------------------------------
Total Assets 32,940 24,591 17,303 14,404
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Shareholders Equity 6,297 5,713 5,251 4,178
-------------------------------------------------------------------------
>>
About Signature Brands Limited
Signature Brands Limited is a publicly traded company. Its shares trade
on the Toronto Stock Exchange under the symbol SBX. In addition, there are
warrants outstanding exchangeable into common shares at 50 cents that trade on
the Canadian Dealing Network under the symbol SBXB.wt.
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For further information: Jim Fisher, Director, (416) 869-4004; Frank
Fini, Director, (416) 860-8812
SIGNATURE BRANDS LIMITED has 3 releases in this database.
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