Fortissimo Acquisition (stock symbol: FSMO.OB), which raised $29.2 million when it went public in November 2006, has announced that is has signed as definitive purchase agreement with Psyop, Inc. asnd Psyob Services, LL, self-described as "an award-winning provider of design based 3D animation, innovative visual effects and digital content for the advertising market."
Psyop, Inc. and Psyop Services, LLC Announce Business Combination With Fortissimo Acquisition Corp.
Tuesday January 15, 8:30 am ET
NEW YORK, Jan. 15, 2008 (PRIME NEWSWIRE) -- Psyop, Inc. and Psyop Services, LLC (collectively ``Psyop'' or the ``Company'') today announced that it has signed a definitive agreement pursuant to which the Company will consummate a business combination with Fortissimo Acquisition Corp. (``Fortissimo'') (OTC BB:FSMO.OB - News), a special purpose acquisition company.
Headquartered in New York City, Psyop is an award-winning provider of design based 3D animation, innovative visual effects and digital content for the advertising market. The company produces creative advertisements on behalf of premier brands in a variety of industries, including food and beverage, sports, automotive, retail and financial services. In addition to its creative production for television advertising, Psyop has recently expanded into producing content for other, growing forms of electronic marketing including short themed branded films, ads shown in movie theaters, in-store and site specific presentations and the Internet.
TERMS OF TRANSACTION
Pursuant to the agreement, Fortissimo will acquire all of the outstanding equity of Psyop for $29.4 million, consisting of approximately $19.3 million worth of stock and approximately $10.1 million of cash. Fortissimo will also pay up to an additional $13.75 million in cash and stock if Psyop's revenue equals or exceeds certain specified targets (ranging from $31.0 million in fiscal 2008 to $59.0 million in fiscal 2010) and if Psyop's EBITDA equals or exceeds certain specified targets (ranging from $4.7 million in fiscal 2008 to $10.0 million in fiscal 2010). In addition, if at least a majority of the outstanding Fortissimo warrants are exercised before October 10, 2010, Psyop will receive a minimum additional payment of $4.0 million, which will be increased to $10.0 million if all of the warrants are exercised upon a redemption call by Fortissimo. Following the closing of the transaction, Fortissimo will be renamed Psyop, Inc. Members of Psyop's senior management currently own Psyop.
The transaction will be financed by Fortissimo's cash on hand, including a portion of the approximately $27.5 million held in trust for the exclusive use of effectuating its business combination, and from the issuance of additional shares of Fortissimo common stock.
Fortissimo has received an opinion from Houlihan Smith & Company, Inc., an independent investment banking firm, that the purchase price is fair, from a financial point of view, to Fortissimo's stockholders. The transaction is subject to Fortissimo's receiving stockholder approval of the transaction and customary closing conditions. It is anticipated that the transaction will close in the second quarter of 2008.
Following the closing of the transaction, Justin Booth-Clibborn, currently a Psyop shareholder and Executive Producer at Psyop, will become the Chief Executive Officer of the surviving company. Mr. Booth-Clibborn stated ``This is a great time for us at Psyop to leverage both our brand and the experience and capital of Fortissimo Acquisition Corp. in order to grow the business both in terms of geographical expansion and in terms of capitalizing on new opportunities in digital content creation.''
With Fortissimo's assistance, Psyop intends to open an R&D facility in Israel where it can develop its own proprietary tools and software in a cost effective way, to enable it to retain its leading edge in the industry.
For the fiscal year ended December 31, 2006, Psyop generated revenue of approximately $15.8 million. For the nine months ended September 30, 2007 (unaudited), Psyop generated revenue of approximately $20.1 million. Psyop experienced a compounded annual growth rate in revenue from fiscal 2004 to fiscal 2006 of 33.6% and a 72.0% increase in revenue in the first nine months of 2007, as compared with the same period in 2006.
Yuval Cohen, Chairman of Fortissimo, stated, ``There is a growing market niche of entertaining, narrative-driven messages and Psyop's proven creative ability has positioned them to take advantage of this significant market opportunity. We are confident that with our financial backing and strategic guidance, we can facilitate additional growth via international expansion, the acquisition of talent and extension into other forms of media.''
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