24 Jul 2009 09:01
UBC Media Group plc
("UBC" or the "Company")
Further Cash Consideration from GTN to settle Earn Out and release UBC from certain Restrictive Covenants
UBC, the supplier of audio content and broadcast data software to the radio industry, is pleased to announce that it has entered into an agreement with Global Traffic Network Inc. ("GTN") for the settlement of the earn out provisions contained in the earlier agreement for the sale of the Company's Commercial Division.
GTN have agreed to pay to UBC a further cash consideration of £1,950,000 and UBC has agreed to release GTN from its obligations under the earn out contained within the agreement signed by the two parties on February 1 2009.
At the same time, UBC has agreed to pay GTN a cash consideration of £50,000 for the return to UBC of the part of the Commercial Division responsible for Sponsorship, Promotions and Interactive Marketing (trading as 'Intamedia'). GTN has further agreed to release UBC from those elements of the restrictive covenants that cover this area of business.
In the 11 month period before the original sale of the Commercial Division to GTN, the Intamedia business had a turnover of £1,028,586 and made a contribution to Operating profit of £138,687.
Simon Cole, Chief executive of UBC commented:
"This final chapter of our transaction with GTN takes our total net cash receipts for the sale of the Commercial Division to nearly £11 million. The payment to remove the earn out is sensible, providing as it does certainty in an unpredictable advertising market. The cash sum paid represents what would have been expected by next year had the business continued to track at its current sales rate. In addition, we are released from part of our restrictions under the original deal and welcome back to UBC the team responsible for Sponsorship and Interactive Marketing. This is the part of the commercial business that always shared the most synergies with our core production businesses and, whilst I can understand GTN's desire to focus on their core business of airtime sales, we can see opportunities for growth in this area in the future. "
Ends
Enquiries
Simon Cole, CEO, UBC Media Group plc Tel: 020 7453 1600
Mark Percy or Sarah Jacobs, Seymour Pierce Limited Tel: 020 7107 8000
Notes to Editors
About UBC Media Group
UBC is quoted on the London Stock Exchange's AIM market. UBC is the market leader in the supply of audio content to the radio industry in the UK. The Group is the largest independent producer of radio programming for the BBC and a provider of entertainment programming to commercial stations throughout the UK. Its software division, Unique Interactive, is a global supplier of digital radio text and data services. The company is also part of the MXR Digital Radio Multiplex consortium.
For more information, visit the Company's website at www.ubcmedia.com.
About Global Traffic Network Inc.
Global Traffic Network, Inc. (Nasdaq: GNET) is a leading provider of custom traffic and news reports to radio and television stations outside the U.S. The Company operates the largest traffic and news network in Australia, operates traffic networks in eight Canadian markets and has recently commenced operations in the United Kingdom. In exchange for providing custom traffic and news reports, television and radio stations provide Global Traffic Network with commercial airtime inventory that the Company sells to advertisers. As a result, radio and television stations incur no out-of-pocket costs when contracting to use Global Traffic Network's services.
For more information, visit Global Traffic Network, Inc.'s website at www.globaltrafficnetwork.com.