Acquisition to Allow XFMedia to Market Its Content Through New Media and Create New Interactive Services Associated with Popular Programming
BEIJING, June 4 /Xinhua-PRNewswire-FirstCall/ -- Xinhua Finance Media ("XFMedia"; Nasdaq: XFML), China's leading diversified financial and entertainment media company, today announced it has signed an agreement to acquire a 100% interest in Beijing Mobile Interactive Co., Ltd ("M-in"). This acquisition is intended to enable XFMedia to rapidly integrate mobile service capabilities with its existing range of popular media assets and market a variety of new interactive products and services to more than 487 million mobile phone users in China.
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Founded in November 2003, M-in is a mobile service provider ("SP") in China with SP licenses nationwide operating on wireless Mobile Value-Added Service (MVAS) platforms. Its wide range of mobile capabilities include WAP (Wireless Application Protocol), text messaging (SMS), Multimedia Messaging Service (MMS), Interactive Voice Response (IVR), JAVA based software applications including online gaming, and Color Ring Back Tone variously supported by China Mobile, China Unicom, China Netcom and China Telecom.
M-in has built extensive marketing and distribution channels including television, print, Internet and other media, and it creates and manages a wide range of mobile and online interactive products. Its MVAS applications are pre-loaded on certain models of Sony-Ericsson, Bird and other leading China cell phone companies. Its products, which include online games, text messaging voting, ring tone and wallpaper downloads, have been used by more than 10 million users.
XFMedia CEO Fredy Bush said, "M-in is an innovator in China's MVAS market, and our acquisition of it is the first step in our plan to expand XFMedia's distribution into new media. XFMedia intends to integrate M-in's MVAS platform and mobile interactive capabilities with our existing media assets such as our high-quality business, entertainment, education and drama shows, allowing viewers to interact with the shows through text messaging."
"XFMedia also plans to use M-in's capabilities to offer mobile interactivity with its radio and print divisions. In addition, XFMedia intends to create new products and services for China's more than 487 million mobile phone users who send billions of short messages annually. New revenue sources are expected to be created through marketing Q&A campaigns, and voting and commentary services for TV programs such as Fortune China via text messaging, or by providing access to our instant financial news updates via WAP or IVR services," Ms Bush added.
The Chief Executive Officer Ms Ao Meng and key management of M-in have signed employment contracts and will remain with the company.
Ms Ao said she expects synergies with other parts of XFMedia to help boost M-in's earnings.
"M-in's creative and user-friendly products and services set new trends in mobile communication industry," she said. "I believe MVAS is becoming the mainstream of cross-media communication. The integration of XFMedia's unique media platform with its range of popular video, audio, digital and print content and M-in's technology and established distribution network can differentiate itself from traditional media most significantly by segmentation and interactivity. This cross-media network offers advertisers the ability to target different demographics and behavior patterns for different promotion purposes," Ms Ao said.
The company is the exclusive partner of China Mobile's Monternet education channel, with more than two million users per month. It is the exclusive partner of the China National Women's Association for donations made by text messaging. The company is also the exclusive value added service partner for the voting on "World Top Ten Athletes", a well-known event approved by the China State General Administration of Sport.
According to statistics from the Chinese Ministry of Information and Industry, approximately 429.7 billion short messages were sent in 2006, an increase of 41% over 2005. That is an average of around 330 short messages for each person in the country. There are now estimated to be over 487 million mobile phone users in China.
The transaction is expected to close on or prior to 15th June 2007. Under the agreement, XFMedia will acquire 100% control of M-in through the purchase of 100% of the shares of East Alliance Limited, a company which conducts M-in's business through its wholly owned subsidiary and affiliated entities in China. XFMedia will pay approximately US$10 million in cash to the seller at the closing, and the vendors will be entitled to earnout payments in cash and shares of XFMedia depending on their 2007 and 2008 financial performance.
The transaction is expected to be accretive to XFMedia's earnings per share in 2007.
About Xinhua Finance Media Limited
Xinhua Finance Media ("XFMedia"; Nasdaq: XFML) is China's leading diversified financial and entertainment media company targeting high net worth individuals nationwide. The company reaches its target audience via TV, radio, newspapers, magazines and other distribution channels. Through its five synergistic business groups, Advertising, Broadcast, Print, Production and Research, XFMedia offers a total solution empowering clients at every stage of the media process and keeping people connected and entertained.
Headquartered in Beijing, the company has offices and affiliates in major cities of China including Beijing, Shanghai, Guangzhou, Shenzhen and Hong Kong. For more information, please visit http://www.xinhuafinancemedia.com .
Xinhua Finance Media is a subsidiary of Xinhua Finance Limited ("XFL"; TSE Mothers: 9399), China's premier financial information and media service provider. XFL owns 36.9% of the equity and 85.4% of the voting rights of XFMedia through its holding of class B common shares, which have ten votes per share. The investing public, the company's China partners, executives and staff own class A common shares in the company with one vote per share. The dual-class common share structure was created to accommodate the regulatory landscape of China's media sector.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Among other things, quotations from management in this announcement contain forward-looking statements. XFMedia may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 20-F and 6-K, etc., in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about XFMedia's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statements. Potential risks and uncertainties are risks include but are not limited to, the risk that the transaction may not close when expected or at all, the China advertising market may not grow as expected and the risks, i outlined in XFMedia's filings with the U.S. Securities and Exchange Commission, including its registration statement on Form F-1. All information provided in this press release is as of the date of this release, and XFMedia undertakes no duty to update such information, except as required under applicable law.
For more information:
China
Xinhua Finance Media
Ms. Joy Tsang
Tel: +86-21-6113-5999
Email: joy.tsang@xinhuafinancemedia.com
United States
Taylor Rafferty
John Dudzinsky
Tel: +1-212-889-4350
Email: john.dudzinsky@taylor-rafferty.com
