Full Press Release Details
| FOR IMMEDIATE RELEASE | CONTACT: | Hill & Knowlton (for New Motion) |
| September 27, 2007 | Nicola Piggott | |
| Nicola.Piggott@hillandknowlton.com | ||
| 310-633-9478 | ||
| KCSA (for Traffix) | ||
| Todd Fromer tfromer@kcsa.com x215 | ||
| Beth More bmore@kcsa.com x224 | ||
| 212-682-6300 |
MOTION, INC. AND TRAFFIX, INC. TO MERGE,
MAJOR, VERTICALLY INTEGRATED
ENTERTAINMENT NETWORK'
Combined 2008 Revenues Ranging from
CA & PEARL RIVER, NY -
Motion, Inc. (OTCBB: NWMO), a leading digital entertainment company providing
broad range of online and mobile content services, and Traffix, Inc. (NASDAQ:
TRFX), a premier interactive media company, today announced that they have
entered into a definitive agreement to merge in a stock for stock merger. The
combined companies will have the resources to create a vertically integrated
Mobile Entertainment Network' that can play a major role in the mobile
terms of the merger agreement, Traffix shareholders will receive approximately
0.683 of a share of New Motion for each share of Traffix. The exchange
ratio was determined by the parties so that Traffix shareholders will own 45%
the combined company, on a fully diluted basis, and New Motion shareholders
own 55%. The exchange ratio is subject to adjustment under certain
circumstances. Based upon the closing price of New Motion shares on
September 26, 2007, the date the merger agreement was signed, the merger
consideration would have a value of approximately $10.59 per Traffix
projects that, assuming completion of the transaction by the end of 2007,
revenues of the newly combined entity for 2008 could reach between $145 and
combined company will allow consumers to experience content where they want
how they want it, when they want it. The new entity will operate a vertically
integrated mobile entertainment network with diverse customer acquisition
platforms, an extensive library of proprietary digital content, and a large,
growing subscriber base.
converging a high quality online user experience and an extensive Internet
distribution platform with mobile portability and premium billed subscription
services, the combined entity has an unprecedented opportunity. Management
both New Motion and Traffix believe that the combined company will maximize
yield of Traffix's online advertising media while decreasing New Motion's
average cost per new subscriber, increasing profitability of the combined
working with Traffix during 2007, we realized the value a mature Internet media
company can add to efficiently growing a mobile entertainment business. This
newly combined business can have a unique competitive advantage, by providing
low cost content to the large online audience that Traffix has developed and
able to reach through its advertising network,'' said Burton Katz, chief
executive officer of New Motion. "This merger is expected to accelerate New
Motion's growth and create a Mobile Entertainment Network' that we plan to
expand through the introduction of new products as well as the continued
penetration of our existing services domestically and internationally. In
addition, following closing of the merger we plan to continue actively seeking
other potential acquisitions which will benefit from our size and
L. Schwartz, chief executive officer and chairman of the board of Traffix,
"This merger pairs two successful companies that understand how to harness
Internet and mobile technologies to deliver enjoyable entertainment with
targeted marketing. Together, the combined companies are expected to leverage
the strong technology, wide online reach, proprietary content, and advertising
platform Traffix has built with the compelling premium mobile services New
Motion offers consumers. Traffix considers this the right time to capitalize
the expanded marketing opportunities presented by the growth of mobile
marketing, and we expect the transaction to be earnings accretive to our
completion of the merger, Katz will continue to lead the combined company as
chief executive officer. Andrew Stollman, currently president of Traffix, will
serve as president of the combined company. Schwartz will step down as chairman
and director, and continue as a consultant for the combined company. The Board
of Directors of the combined company following the merger will initially consist
of seven persons, with three persons designated by New Motion, two of whom
be independent directors, three persons designated by Traffix, two of whom
be independent directors, and the chief executive officer of New Motion.
company's board of directors has recommended approval of the transaction by its
shareholders. In addition, a special committee of Traffix's independent
directors recommended approval of the merger by Traffix's Board. Consummation of
the transaction remains subject to customary conditions to closing, including
approval by shareholders of both companies. Shareholders of New Motion holding
an aggregate of 29.6% of New Motion's outstanding shares have agreed to vote in
favor of the transaction. Schwartz and Stollman, holding an aggregate of 14.6%
of Traffix's outstanding shares, have agreed to vote their shares in favor of
upon currently outstanding shares, each Traffix share will be converted into
approximately 0.683 of a share of New Motion common stock, constituting
approximately 45% of the shares of the combined company, on a fully diluted
basis. Both companies will continue to trade under their own ticker
symbols until the deal closes. Under the Merger Agreement, if Traffix's
Board approves payment of its regular quarterly dividend, Traffix may continue
to pay a regular quarterly dividend until such time as the registration
statement relating to the shares of New Motion common stock to be delivered
Traffix shareholders in the merger has been declared effective by the Securities
and Exchange Commission.
Motion's Board of Directors retained Jefferies & Company to advise it in
connection with the proposed transaction, and Stubbs Alderton & Markiles,
LLP is acting as legal counsel for New Motion. Traffix's special committee
retained Stephens, Inc. to advise it on the fairness of the proposed merger,
Feder, Kaszovitz, Isaacson, Weber, Skala, Bass & Rhine LLP is acting as
counsel to Traffix and Wolf, Block, Schorr and Solis-Cohen LLP is acting as
legal counsel to Traffix's Board Special Committee. Subject to regulatory
approval, it is expected that the merger will be completed by the end of 2007
during the first quarter of 2008.
companies have scheduled a conference call for Thursday, September 27, 2007
1:30 p.m. PDT / 4:30 p.m. EDT, New Motion chief executive officer Burton Katz
will be making a statement, and Katz and Traffix chief executive officer and
board chairman Jeffrey Schwartz will be answering questions from call
participants. Interested parties should dial in to 1-800-857-4254 (International
dial in: 1-773-799-3910), using pass code 2867174. Subsequently, the recorded
call will be posted at www.newmotioninc.com
Motion, Inc. (OTCBB:
digital entertainment company providing a broad range of digital and mobile
products and services to consumers. New Motion, Inc. combines the power of
Internet, the latest in mobile technology, and traditional marketing /
advertising methodologies to their brands: MobileSidewalk ,