DCD.L Regulatory News (DCD)

27 Jan 2006 07:00

Embargoed: 0700hrs, 27 January 2006 Digital Classics plc ("Digital Classics" or the "Company") Acquisition of Done and Dusted Group Limited ("Done and Dusted") Digital Classics plc is pleased to announce that, having recently completed theacquisitions of Box TV Limited and NBD Holdings Limited, it has today signedagreements to acquire a third profitable company as a further step in itsstrategy to transform the Group into a television production and distributionpowerhouse. The Company has acquired Done and Dusted, believed to be the UK andEurope's leading independent producer of popular music event programming for TVand DVD. Details of the total consideration are set out below.Done and Dusted has filmed rock concerts by Robbie Williams, Madonna, BritneySpears, Norah Jones and many others as well as major events such as T4 On TheBeach, the X-Box 360 Product Launch, the Laureus World Sports Awards and theVictoria's Secret Fashion Show. Many of the events it films recur annually, andits profits have grown significantly each year for the past three years. Untilnow Done and Dusted has not retained any exploitation rights in the productionsit makes, however the Company anticipates that this will change with the resultthat some of its programming may be passed to NBD TV, the recently acquiredspecialist popular music distributor who will, by virtue of ownership, have"firstlook" at the Done and Dusted production schedule. Done and Dusted hasalso identified a significant growth opportunity in the US marketplace and isactively investigating opportunities in the rapidly expanding 3G marketfollowing a successful collaboration with Robbie Williams and T-Mobil inGermany.These acquisitions are designed to give the Group critical mass and to exploitthe recent legislative changes in the UK TV industry. The acquisition of Doneand Dusted will be funded as to ‚£5,775,000 in cash and by the issue of721,875,000 consideration shares. The cash portion of the consideration for theAcquisition is to be funded in part through a placing by Evolution SecuritiesLimited of 928,344,230 new ordinary shares of 0.1p each ("Ordinary Shares") at0.65p per share raising approximately ‚£6.0 million (before expenses).Additional loan notes will be subscribed for and issued to satisfy the balanceof the cash consideration under the Acquisition Agreement. The proposedacquisition is classified as a reverse takeover under the AIM Rules by virtueof its size. As such, it is subject to the approval of shareholders, which isbeing sought at an extraordinary general meeting of the Company, to be held on21 February 2006.The acquisition is expected to be earnings enhancing in its first full year ofconsolidation. The enlarged company proposes to change its name to DCD Mediaplc.The directors of Done and Dusted have signed new service contracts whereby theyhave agreed to work for Done and Dusted for a minimum of three years, and theirshares cannot be traded for two years. Upon completion, it is anticipated thatSimon Pizey, Managing Director of Done and Dusted, will join the board of theCompany.In the year ended 31 December 2004, Done and Dusted made a normalised profitbefore tax of ‚£835,000 on turnover of ‚£7.124 million. In the six months ended30 June 2005, it made a profit before tax of ‚£756,000 on turnover of ‚£4.85million.Application has been made for the enlarged issued ordinary share capital of2,963,315,714 shares, comprising the 1,313,096,484 existing shares, the721,875,000 consideration shares to be issued pursuant to the acquisition andthe 928,344,230 new shares to be issued pursuant to the placing, to be admittedto AIM. Admission is expected to become effective on 23 February 2006. Copiesof the admission document are available at the registered office of the Company(30 Farringdon Street, London, EC4A 4HJ) and at the offices of EvolutionSecurities Limited (100 Wood Street, London, EC2V 7AN).Digital Classics' Chief Executive Chris Hunt said,"Digital Classics already owns the world's largest classical music programmedistribution catalogue and from this has sprung a new DVD production business.The recent acquisition of Box TV has enabled entry to the drama productionmarketplace, and the simultaneous acquisition of the distribution business, NBDTV, has provided access to the popular music market for the distributiondivision. The acquisition of Done and Dusted will propel the Group to an evenstronger position as it expands the production side of the business from thatof mainly serious music, arts and drama to the highly lucrative internationalpopular music arena.We are, today, a much more widely based entertainment group with the ability toproduce high level content, and distribute it, and take it to DVD, entirelyin-house."Done and Dusted Managing Director Simon Pizey commented,"Joining the Group will give Done and Dusted a significant shot in the arm andallow it to secure IP rights and fast-track its current expansion into the US.Good news for the company, and for the group shareholders."For further information please contact,Chris Hunt, Chief ExecutiveDigital Classics plcTel. 020 7636 1400Ben Simons / Adam ReynoldsHansard CommunicationsTel. 020 7245 1100ENDDIGITAL CLASSICS PLC