STUDIO CITY, Calif., Dec. 12, 2006 (PRIME NEWSWIRE) -- Tix Corporation (OTCBB:TIXC) (the "Company") has signed a non-binding Letter Agreement outlining the terms and conditions and general process to acquire Exhibit Merchandising LLC, whose principal members are Joe Marsh and Lee Marshall, both of whom are current shareholders of the Company. In addition, Mr. Marsh has been providing consulting services to the Company since July 2006.
The Letter Agreement provides that the Company will pay the greater of a six-times calendar 2008 EBITDA or $4 million, resulting in an initial purchase price of $24 million, payable $10 million in cash and $14 million in shares of restricted common stock at a fixed price of $4.00 per share. Additional consideration based on calendar 2008 EBITDA will be paid in the form of shares of the Company's restricted common stock valued at the thirty-day closing bid price prior to December 31, 2008, but in no event less than $4.00 per share. Based on the current and expected future operations of Exhibit Merchandising LLC, such additional consideration could be substantial. Management of the Company will retain voting rights with respect to shares of common stock issued to acquire Exhibit Merchandising LLC.
The Letter Agreement provides for a thirty-day exclusive negotiation period and a subsequent ninety-day due diligence period for the Company to conduct a financial and operational review of Exhibit Merchandising LLC, to draft definitive transaction documents, and to obtain financing for the transaction. The Company intends to raise the funds required to close this transaction through a private placement of its equity securities.
The Letter Agreement is subject to, among other conditions, satisfactory completion of due diligence, obtaining $10 million of new financing, negotiation, preparation and execution of definitive transaction and financing documents, preparation of consolidated financial statements, compliance with state and federal securities laws and regulations, and receipt of the requisite corporate approvals. The transaction is expected to close during the second quarter of 2007. However, as a result of the foregoing uncertainties, there can be no assurances that the transaction will be completed. Furthermore, even if the transaction is completed, there can be no assurances that the future operations of the acquired business will be successful.
Mitch Francis, CEO of Tix Corporation, commented, "We are delighted by the prospect of acquiring a growing business such as Exhibit Merchandising LLC." He continued, "We believe that there exists a synergistic fit with our core business of half-price ticket sales for Las Vegas shows and concerts, as well as with our dinner and golf reservation businesses, through leveraging our existing relationships with these vendors to offer branded merchandise to them. We are hopeful that this acquisition will become a material contributor to the Company's operations and cash flows for years to come."
About Exhibit Merchandising LLC
Exhibit Merchandising LLC, located in Akron, Ohio, was formed in 2004 to handle the affiliated merchandising opportunities that its principals created in forming Arts & Exhibitions, a partner in the successful King Tutankhamen museum exhibition currently touring the world's top museums. Exhibit Merchandising LLC was able to successfully negotiate exclusive merchandising rights for the "King Tut" tour, which immediately made the merchandising company both profitable and highly visible in the museum marketplace.
Exhibit Merchandising LLC has a 5-year contract to sell King Tutankhamen and the Golden Age of Pharaohs exhibit licensed merchandise through its own outlets or museum stores worldwide, and is currently grossing more than $1.4 million monthly. Exhibit Merchandising LLC also signed a 5-year contract to sell "Pirates, the Exhibition" museum tour merchandise worldwide, which is scheduled to commence as a touring exhibit in 2007. There is also a long-standing arrangement to sell Jesus Christ Superstar licensed merchandise to accompany the musical's road tour. Exhibit Merchandising LLC is also in discussions with numerous new museum-type exhibits to supply merchandising.
Exhibit Merchandising LLC sells themed souvenir posters, memorabilia and collectors' items in specialty stores set up for the duration of a tour's presence at a particular museum. Some of the merchandise is then remaindered to the museum's general gift store, or shipped to the next tour location.
About Tix Corporation
Tix Corporation's wholly-owned subsidiary, Tix4Tonight, sells tickets for Las Vegas shows, concerts, attractions and sporting events at half-price, on the same day of the performance. Tix4Tonight also offers half-price dinner entrees at popular restaurants in Las Vegas, and through its Stand-By Golf division, has also recently begun to offer discount golf reservations at Las Vegas golf courses.
Tix4Tonight has four prime ticket booth facilities, strategically placed at highly foot-trafficked locations in Las Vegas, Nevada. They include the Hawaiian Marketplace at the South end of the Strip, the Fashion Show Mall in front of Neiman Marcus, directly across the street from the new Wynn Resort at the middle of the Strip, North Strip, just South of the Riviera Hotel, and a downtown Las Vegas facility in the Four Queens Hotel, fronting onto the Fremont Street Experience.
For more information and answers to typical questions about how the Tix4Tonight service works, call 877-849-4868 or visit www.tix4tonight.com.
Additional information with regard to the matters discussed in this news release can be found in Tix Corporation's filings with the U.S. Securities and Exchange Commission, which can be accessed without charge at http://www.sec.gov.
Cautionary Statement pursuant to Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995:
All statements in this news release that are not statements of historical fact are deemed to be forward-looking statements, including our expectations with respect to the acquisition of Exhibit Merchandising LLC and its operations and cash flows. These forward-looking statements are based on expectations and assumptions as of the date of this press release and are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. Many of these risks and uncertainties are identified in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to update these forward-looking statements. This document is only for the general information of shareholders, potential investors and other interested parties, and is not to be construed as an offer to sell or the solicitation of an offer to buy any securities. The opinions expressed herein are the current opinions of management as of the date appearing on this document.