RNS Number : 2431W
JumpTV Inc.
09 June 2008
JumpTV and NeuLion to Merge and Create Internet Protocol Television
(IPTV) and Web Streaming Powerhouse
IPTV Leaders to Come Together to Offer End-to-End Multi-Platform
Enterprise Solution for Online Sports, International and Religious
Programming
TORONTO -- (MARKET WIRE) -- 06/09/08 -- JumpTV Inc. ("JumpTV"),
(TSX: JTV) (AIM: JTV), a leading broadcaster of live and on-demand
sports and international television over the Internet and NeuLion,
Inc. ("NeuLion"), an end-to-end IPTV service of live and on-demand
sports, international and religious programming over the Internet and
through set top boxes, today announced the companies have signed a
binding letter of intent to merge (the "Transaction"), creating a
leading enterprise IPTV provider of online sports, international and
religious programming.
Under the terms of the Transaction, JumpTV will issue 49,521,958
common shares, 1,840,097 contingent shares, which represents
approximately the entire issued and outstanding shares of JumpTV, and
5 million warrants exercisable for two years at US$0.05 above the
five-day weighted average closing price prior to the execution of the
Definitive Agreement, to the securityholders of NeuLion, in exchange
for their NeuLion securities. JumpTV also intends to grant 2.7
million employee stock options, subject to securities law and
exchange rules compliance, exercisable at the five-day weighted
average closing price prior to closing, which is expected to be on or
before October 1, 2008.
Founded in 2004, NeuLion, a private corporation based in Plainview,
New York, provides web-based IPTV services to leading sports customers
such as the National Hockey League and the International Fight
League. NeuLion also delivers a Set Top Box IPTV solution to premier
international customers such as ABS-CBN (Philippines), KylinTV
(China) and Globecast (France). NeuLion recorded unaudited revenue
for year ended December 31, 2007 of US$7.8 million and a net loss of
US$4.0 million inclusive of US$1.5 million of non-cash minority
interest losses.
NeuLion's financial information is unaudited; however, this financial
information will be audited in connection with the Transaction and
included in the Information Circular for the JumpTV shareholders.
JumpTV has engaged Oppenheimer & Co. Inc. as its financial advisor in
connection with the Transaction and JumpTV's Board of Directors has
retained Canaccord Adams to provide a fairness opinion which will be
included within the information circular in advance of the
shareholder vote.
The Transaction is expected to be completed in the Fall of 2008,
subject to receipt of shareholder and customary regulatory approvals,
as well as satisfaction of other customary closing conditions. The
merged company will continue to be listed on the Toronto Stock
Exchange ("TSX"). In accordance with the rules of the AIM market of
the London Stock Exchange ("AIM"), the Company's shares have been
suspended from trading on AIM until the completion of the
Transaction. At that time, the Company will either reapply for
admission for trading or will seek its shareholders' approval for
cancellation of the listing. The parties anticipate significant
operational and human resource synergies and expect an aggregate
headcount reduction of approximately 60 people by December 31, 2008.
The merged entity brings together two IPTV industry leaders to
deliver a multi-platform IPTV and set top box solution encompassing:
-- Sports: More than 200 partnerships with leading professional and
collegiate sports properties, including the National Hockey League (NHL),
more than 150 NCAA colleges and universities, the World Championship Sports
Network and the 2010 South American, African and Asian World Cup Qualifiers
-- International: More than 200 partnerships with premier international
networks and channels, such as KyLinTV, the first Internet television
service dedicated to the Chinese community living in North America, and ABS-
CBN, the number-one TV network in the Philippines
-- Multi-Platform: Live and on-demand video streaming over the Internet
including NeuLion's Set Top Box solution for streaming to television
-- Web Services: JumpTV's end-to-end "One Fan Profile" online customer
relationship management (CRM) solution which includes web hosting, video
streaming, ticket management and e-commerce
"The combination of our highly complementary technologies and depth
of expertise in the areas of sports and international IPTV delivery
makes for incredible synergy between the two companies," said G.
Scott Paterson, Executive Chairman, JumpTV. "This merger enables us
to provide our partners with a complete solution for streaming
content live online across multiple devices and viewing platforms."
"Consumers are becoming more reliant on broadband and Internet
services for their media experiences and this shift creates enormous
opportunity for content owners to reach untapped global audiences,"
said Nancy Li, Founder and CEO of NeuLion. "NeuLion and JumpTV have
committed to creating a one-of-a-kind enterprise offering that
manages the end-to-end delivery of content through all broadband
platforms: the PC, the TV, and an array of mobile devices."
Terms of the Agreement
The transaction is conditional on the companies entering into a
definitive agreement on or before June 25, 2008 (the "Definitive
Agreement") and shareholder approval at a meeting anticipated to be
held on or about October 1, 2008.
In connection with the merger, JumpTV has decided to retain certain
assets of its content delivery network (CDN) and international
channels, which it will leverage within the combined company
structure and multi-platform IPTV offering. JumpTV previously
disclosed that it intended to divest its CDN and international
channels.
Sports Programming
The merger brings together the largest online offering through the
following partnerships and properties:
-- National Hockey League
-- NCAA Division I schools and conferences
-- 2010 South American, African and Asian World Cup Qualifiers
-- World Championship Sports Network
-- International Fight League
-- World class pro-cycling events such as the Giro d'Italia, Tirreno-
Adriatico, Milan-San Remo, and the Vuelta a Espana
In March, 2008, comScore ranked JumpTV as the �1 most engaging
website among those in the sports video category with a recorded 40.4
minutes per viewer per month in the U.S. Additionally, JumpTV viewers
watched approximately 20 million minutes of online sports video in the
U.S. in March ranking it as �4 in the Sports Video Sites category
overall.
During the 2007-2008 National Hockey League season, NeuLion-delivered
NHL broadband service streamed over 1,700 NHL hockey games. In the two
weeks preceding the NHL Stanley Cup playoffs, the service reached over
10 million unique visitors.
In the past 12 months, JumpTV streamed more than 15,000 live sports
events online making it one of the largest broadcasters of
professionally licensed live sports programming over the Internet in
the world.
International Programming
The merged company will provide IPTV services including live and
on-demand video streaming for more than 200 international partners
including:
-- KyLinTV (China)
-- ABS-CBN (Philippines)
-- Globecast (France)
-- Channel i (Bangladesh)
-- Canal 7 (Mexico)
-- America TV (Peru)
-- TV Chile (Chile)
-- MBC Broadcasting (Middle East)
KyLinTV, a 17% minority-owned subsidiary of NeuLion offers more than
40 of the most popular Chinese broadcast TV channels and the largest
selection of Video-On-Demand (VOD), including more than 30,000 hours
of programming.
Religious Programming
The merged company will include NeuLion's partnership with Sky Angel,
a Christian family-friendly TV and radio network. Sky Angel's offering
includes approximately 50 television channels and over 20 faith-based
radio stations.
About the Merged Company
Charles Wang, the founder and former CEO of Computer Associates
International, Inc. (now CA, Inc.), owner of the New York Islanders
and husband of Nancy Li -- will become Chairman of the merged company.
Mr. Paterson, will be Executive Vice-Chairman and Ms. Li will become
CEO and a Director. Jordan Banks will continue to serve as CEO of
JumpTV on an interim basis. Nada Usina, current President of JumpTV,
will continue as President of the merged company.
Upon the execution of the Definitive Agreement, AvantaLion LLC, an
entity controlled by Mr. Wang, has irrevocably committed to subscribe
for 10 million units from JumpTV's treasury at a price of $1.00 per
unit. Each unit (a "Unit") will consist of one (1) common share and
one-half of one common share purchase warrant exercisable at $1.25
and one-half of one common share purchase warrant exercisable at
$1.50. The warrants partially comprising the Units will be
exercisable for a period of two years from the date of issuance.
G. Scott Paterson has also committed to buy 1 million Units on the
same terms. The aggregate gross proceeds from the sale of Units will
be CDN$11 million.
Closing of the proposed Unit offering is scheduled to occur on June
25, 2008. The proposed closing date of the Unit offering is reasonable
and necessary in the circumstances in order to facilitate the
Transaction in accordance with JumpTV's and NeuLion's proposed
timing. Mr. Paterson's subscription will constitute a related party
transaction within the meaning of applicable securities laws.
The common shares and warrants comprising the Units and the common
shares issuable upon exercise of the Units will be subject to resale
restrictions for a period of four months from the closing date under
applicable securities legislation.
Shareholder Call
A shareholder conference call has been scheduled for Monday, June 9
at 4 p.m. Eastern Time, to discuss the transaction and the merged
company.
To participate in the call, interested parties can use the following
dial-in numbers:
US AND CANADA TOLL FREE: 1-866-225-0198
INTERNATIONAL: 416-641-6118
Please dial-in at least 5 minutes prior to the call.
Following the call, a digital replay will be posted (MP3 audio file
format) under the press release section of the JumpTV website at
http://www.jumptv.com/en/about/press_releases.
About JumpTV
JumpTV (www.jumptv.com), (TSX: JTV) (AIM: JTV), is a world leading
broadcaster of live and on-demand sports video over the Internet. In
the last twelve months, JumpTV streamed more than 15,000 live and
exclusive sporting events -- comprised of top college (NCAA),
professional and Hispanic sports coverage -- to millions of fans
globally. JumpTV also delivers a broad offering of internet services
to its partners including web hosting, live event video streaming,
ticket management and e-commerce.
Through JumpTV's consumer websites: JumpTV.com, Cycling.TV and
SportsYa.com, as well as its collegiate and international sports
partner websites, JumpTV streams tens of thousands of hours of live
and on-demand events and international programming over the Internet
each year.
JumpTV gives fans a lifeline to their favorite sports content when
they want it, how they want it, where they want it, wherever they are
in the world.
About NeuLion
Based in Plainview, NY, NeuLion works with content partners to
develop end-to-end solutions for multimedia IPTV services. The NeuLion
iPTV Platform encodes, delivers, stores and manages an unlimited range
of multimedia content, and the Operational Support System (OSS)
maintains all billing and customer support services. NeuLion content
partners are responsible for content aggregation and the sales and
marketing for the individual IPTV service.
Forward-Looking Statement
Certain statements herein relating to JumpTV's plans to merge with
NeuLion, Inc. are forward-looking statements and represent JumpTV's
current intentions in respect of future activities. These statements,
in addressing future events and conditions, involve inherent risks
and uncertainties. Forward-looking statements can by identified by
the use of the words "will," "expect," "seek," "anticipate,"
"believe," "plan," "estimate," "expect," and "intend" and statements
that an event or result "may," "will," "can," "should," "could," or
"might" occur or be achieved and other similar expressions.
Forward-looking statements involve significant risk, uncertainties
and assumptions. Many factors could cause actual results, performance
or achievements to differ materially from the results discussed or
implied in the forward-looking statements. These factors should be
considered carefully and readers should not place undue reliance on
the forward-looking statements. Although the forward-looking
statements contained in this release are based upon what Management
believes to be reasonable assumptions, the Company cannot assure
readers that actual results will be consistent with these
forward-looking statements. These forward-looking statements are
made as of the date of this release and the Company assumes no
obligation to update or revise them to reflect new events or
circumstances, except as required by law. Many factors could cause
the actual results, performance or achievements of the Company to be
materially different from any future results, performance or
achievements that may be expressed or implied by such forward-looking
statements, including: general economic and market segment conditions,
competitor activity, product capability and acceptance, international
risk and currency exchange rates and technology changes. More
specific risks include that the merged entity will not be able to
realize some or all of the expected synergies due to
incompatibilities in the merging businesses, the inability of
management to bring about such synergies or a changing business
environment rendering such synergies inadvisable or uneconomical.
After integrating the businesses the suite of service offerings may
not perform as expected if shifting demand moves in a direction away
from the expected business model of the merged entity, if competitors
are able to take market share away from the merged entity or if
changing technology adversely impacts the merged businesses. In
addition, while the Company expects its content partners and those of
NeuLion to continue and expand their relationship with the merged
entity, there can be no assurance that such relationships will
continue as expected, or at all. More detailed assessment of the
risks that could cause actual results to materially differ than
current expectations is contained in the "Risk Assessment" section of
the Company's 2007 annual MD&A.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of JumpTV's securities in the
United States. The securities have not been and will not be
registered under the United States Securities Act of 1933, as amended
(the "U.S. Securities Act") or any state securities laws and may not
be offered or sold within the United States or to U.S. Persons unless
registered under the U.S. Securities Act and applicable state
securities laws or an exemption from such registration is available.
JUMPTV PR / IR CONTACTS:
NORTH AMERICA
G. Scott Paterson
Executive Chairman
JumpTV
416-368-6464
Jennifer Barron
JumpTV
647-426-1243
jbarron@jumptv.com
Marc Georges
Ricochet PR
Phone: 212-679-3300 x125
Email: mgeorges@ricochetpr.com
NEULION
Andrew Frank
Kreab Group
212-935-0210 - office
afrank@strategy-xxi.com
AIM NOMAD CONTACTS:
UK
Neil Johnson / Andrew Chubb
Canaccord Adams Limited
+44 207 050 6500
This information is provided by RNS
The company news service from the London Stock Exchange
END
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