InfoChoice to acquire business assets of My Money Group
The directors of InfoChoice Ltd have announced that they have entered into a Heads of Agreement to purchase various business assets of the My Money Group Ltd (MYM).
Under the agreement InfoChoice will acquire the Media, Publishing, the online Internet sites mymoney.com.au and mybusiness.com.au, along with the abstracting business ABIX.
Consideration for the purchase will be a total of 22.5 million InfoChoice shares. At the same time InfoChoice will make a placement of a minimum of 6.25 million shares at $0.08c to My Money for $500,000 cash, up to a maximum of 12.5 million shares for $1m.
InfoChoice Chief Executive Officer, Mr Chris Gosselin, welcomed the move saying that it was “another step towards InfoChoice building the critical mass required to become a major player in the information distribution industry in Australia, where real value is being created through the rationalisation of online content providers”.
He added, “My Money’s assets are a great fit with our existing business and with those of BecomeMedia, which we recently acquired. It is our intention to build and operate a significant business centered on Information Distribution across Print, Electronic via Radio and TV, and the Internet”.
The opportunity has arisen to join forces with a well established brand in the finance world, headed by Mr David Koch, the C.E.O. of MyMoney and finance commentator for the Seven Network, and comes just over a month after the acquisition of Become Media for 6.75 million shares and a placement of 22.5 million shares for $1.5 million
Mr Gosselin said, “Since listing in December 1999, Infochoice has conserved its cash resources, while developing our dual brands of InfoChoice.com.au and Infarmation.com.au. We now in a position to purchase assets at reasonable market prices.
MyMoney Group announced a loss for the year to June 2001 of $21.1 million, after acquiring the listed group Channel E during the year. In their announcement to the Australian Stock Exchange of their annual result, My Money directors noted that while there had been significant improvements in the second half, that they were rationalising, closing or disposing of some businesses.
Mr Gosselin said, “The My Money assets we are acquiring are the most valuable to us and make an excellent fit for the combined Infochoice and BecomeMedia. They provide significant possibilities for cross selling, broadening our product range, developing new products and substantially increasing our revenue base. There are also expected to be significant cost synergies across all three businesses going forward”.
The acquisition is subject to approval of InfoChoice’s shareholders for the issue of new shares, and the approval of My Money shareholders to sell the assets. Under the agreement the InfoChoice shares issued to My Money will be distributed pro-rata to their shareholders subject to approval at an Extraordinary General Meeting of My Money shareholders. Following that the company will be wound up and any remaining cash reserves of My Money will be transferred to Infochoice
Mr Gosselin added, “This offers a range of benefits to Infochoice, as we gain added depth of new shareholders, greater liquidity and an increase in our capital reserves. After the placement to Become Media and the My Money placement, the combined Infochoice group is expected to have around $6 million in cash.
“We are keen not to be totally dependent on the internet, and this gives us a great opportunity to expand our operations into the traditional electronic media and print. Our business now covers a range of multi-media platforms, with content the key to our future”.
Under the deal, Mr David Koch will join the board of InfoChoice, as will Mr Geoff Morgan, the chairman of My Money. My Money shareholders will hold a minimum of 22% of the expanded equity in InfoChoice following and the BecomeMedia acquisition and placement.
On an annualised basis, the enlarged group should have revenues approaching $10 million, and we will have great opportunities to expand this in the future as we capitalise on our critical mass and added expertise”– not possible with us remaining separate entities.
Mr Gosselin concluded, “We expect there will continue to be ongoing rationalisation amongst the companies in the online space, with more Internet operations closing, liquidating or being absorbed into those companies with the balance sheet and management capable of taking the opportunities. Advertising and other online models have shown that they will not work in isolation, and that a business requires solid revenues and a sound business model to succeed. We believe we are achieving this through the consolidation of our content operations”.
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