Trying to pick up some RRRR on news (news below)
Apollo Management, L.P. in Agreement to Invest $75 Million Into
Leading Internet Solutions Provider, Rare Medium Group Inc.
- Investment to Transform Rare Medium Into New York-Based Provider of Venture Capital, Internet
Solutions and Professional Services -
NEW YORK, April 15 /PRNewswire/ -- Apollo Management, L.P. and Rare Medium Group Inc. (Nasdaq:
RRRR), raremedium.com, today announced that they have signed a letter of intent under which
Apollo affiliates will invest $75 million of equity into Rare Medium in a transaction that will transform the
company into a one-stop provider of venture capital, Internet solutions and professional services.
This is among the largest single private equity investments ever made in an Internet company by one
investor. Following the closing, Apollo will be Rare Medium's largest single shareholder with an ownership
stake of approximately 25% on a fully diluted basis. As part of the transaction, Apollo is expected to have
the ability to increase its position to approximately 40% through the exercise of warrants that have the
potential to bring an additional $75 million of capital into the company.
Rare Medium is an Internet professional services firm that works with its clients, including Microsoft,
Pfizer, Epson, Compaq, Intel, General Mills, The New York Times and CS First Boston, to develop
E-Commerce strategies, improve business processes, and develop marketing, communications and
branding strategies, as well as interactive content, using Internet-based technologies.
Final terms of the investment are subject to completion of due diligence and final documentation.
"Our goal is to use this investment to become an incubator for the best new technology companies
emerging from Silicon Alley in New York, the Digital Coast in Los Angeles, Dallas, Atlanta, Toronto, San
Francisco and beyond, all cities where we currently have a substantial presence," said Glenn S. Meyers,
Chairman and Chief Executive Officer of Rare Medium. "These markets are particularly ripe for this kind of
effort. Each has an enormous concentration of talent and entrepreneurial energy, but little infrastructure for
converting that energy into large and rapidly-expanding Internet companies, as they have in Silicon
Valley."
Mr. Meyers explained, "Every Internet entrepreneur faces three major problems: access to capital;
technical expertise and execution; and the countless administrative, legal and financial headaches that
confront every start-up company. With this investment and Apollo as our world-class partner, Rare
Medium will be in a position to help entrepreneurs end-run those obstacles by providing a complete
package of venture capital, our pace-setting Internet solutions, which we are prepared to provide to our
portfolio companies in exchange for equity, and professional services support. We could not have asked
for a better or more capable partner than Apollo and we believe this strategy will deliver significant value to
our shareholders and those entrepreneurs who join us."
Marc Rowan, a senior partner of Apollo, said, "Rare Medium is in a unique position. As one of the
country's most sought after Internet solutions providers, it is at the center of what's happening in the
Internet space and has the management expertise, business infrastructure and technical knowledge to
capitalize on it. We look forward to working with the company and assisting it in the execution of its
strategy. Moreover, we believe Apollo's experience and relationships will significantly leverage Rare
Medium's access to capital, deal flow and profile within the investment community."
Additionally, Apollo is working with Rare Medium to build a turnkey set of Internet and Web solutions to
assist Apollo's portfolio companies in developing leading Internet platforms.
Rare Medium employs approximately 250 people. The company is headquartered in New York City and
has offices throughout the United States.
Apollo Management, L.P. is a private investment firm based in New York and Los Angeles. Since its
inception in 1990, Apollo and its affiliate funds have invested over $10 billion of capital in response to the
needs of its strategic partners in a broad range of industries.
Except for historical matters contained herein, the matters discussed in this press release are
forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Investors are cautioned that these forward-looking statements reflect numerous
assumptions and involve risks and uncertainties that may affect Rare Medium Group Inc. (Nasdaq:
RRRR), and its subsidiaries' business and prospects and cause actual results to differ materially from
these forward-looking statements. Among the factors that could cause actual results to differ are Rare
Medium's limited operating history; competition; low barriers to entry; reliance on strategic relationships;
rapid technological changes; inability to complete transactions on favorable terms and those risks
discussed in the company's filings with the SEC.
SOURCE Apollo Management, L.P.
/CONTACT: Marc Rowan, Senior Partner of Apollo Management, 212-261-4008;
or Glenn S. Meyers, Chairman, CEO and President of Rare Medium Group Inc.,
212-634-6950, glenn@raremedium.com; or Media - Josh Pekarsky or Molly Morse of
Kekst and Company, 212-521-4800/
/Web site: raremedium.com
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