TORONTO, May 1 /PRNewswire-FirstCall/ -- Kaboose Inc. (TSX: KAB), the largest independent online media destination for moms and kids, today announced that it has signed a definitive agreement to acquire BabyZone.com, Inc. ("BabyZone"), the largest independent online destination focusing on pregnancy and parenting in the United States.
Under the terms of the BabyZone transaction, Kaboose will acquire all of the outstanding shares of BabyZone for US$22 million plus 2 million Kaboose warrants. In addition, BabyZone Shareholders may receive further proceeds payable on an earn-out arrangement based on BabyZone meeting pre-determined operating targets in 2006 and 2007.
BabyZone Highlights:
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- Largest independent online destination focused on pregnancy and new
parents in North America.
- Generated US$4.27 million in revenues in 2005, 69% growth over 2004.
- Generated EBITDA (earnings before interest, taxes, depreciation,
amortization and share-based compensation) of US$1.47 million in
2005, 88% growth over 2004.
- Over 2 million unique monthly users, over 5 million visits per month
(source: WebTrends) and over 2 million registered users.
- Long standing Fortune 500(TM) client list, including Proctor &
Gamble, Kimberly Clark, Gerber, Nestle, Fisher-Price, Kodak,
GlaxoSmithKline, Disney and Gap Inc.
- Over 100,000 pages of content and over 80 local sites with local
parenting resources and family events specialized for each individual
market.
- Generates revenue through online branded advertising, of which 95% is
from the U.S.
- Both co-founders, Lew Bednarczuk (President and CEO) and Jeanine Cox
(Executive Vice President and Publisher) will be continuing in their
respective roles and will become part of the Kaboose management team.
"The acquisition of BabyZone is the biggest and most exciting step we have made in our strategy to consolidate the online family market," stated Jason DeZwirek, Co-Founder and Chief Executive Officer of Kaboose. "BabyZone's two million unique monthly users vault Kaboose into one of the top-five most visited online family destinations with over ten million combined unique monthly users, putting us only behind such giants as Disney and Viacom. This positions Kaboose as a premiere site for advertisers to reach this valuable niche audience of moms who control approximately US$1.7 trillion in spending power. In addition, BabyZone's existing Fortune 500(TM) client relationships compliment those of Kaboose and will enable new and significant cross-selling opportunities between the two properties."
Lew Bednarczuck, BabyZone's President and CEO said, "We are very excited to be involved in creating the largest independent kids and family online media property in North America. Kaboose is one of the fastest growing new media companies in our space. Our complementary businesses, talented teams and shared visions will deliver unmatched value for consumers and advertisers."
Jeanine Cox, BabyZone's Executive Vice President and Publisher said, "This is a perfect blend of media properties. Our loyal audience of new and expecting parents will have a place to turn when their "babies" grow up. Not only will parents continue to receive best-in-class content, tools and support, but also they will have a safe online destination to send their children. The entire BabyZone team is very excited to be working closely with Kaboose to become a true leader in our sector."
Completion of the BabyZone Acquisition is subject to regulatory approval and Kaboose obtaining satisfactory financing. Kaboose has retained a syndicate of investment dealers led by GMP Securities Inc. to raise the required capital.
Kaboose is also pleased to announce that it has signed a definitive agreement to acquire substantially all of the assets of Two Peas Inc. ("Two Peas") (http://www.twopeasinabucket.com/) for US$600,000 in cash with additional consideration to be paid to the owners of Two Peas on an earn-out basis. Two Peas is the largest online scrapbooking community in the U.S. Scrapbooking is a multibillion dollar industry that has quickly transitioned to the Internet. The sector has quadrupled over the last five years and is the fastest growing hobby segment, according to the Craft & Hobby Association. In addition to operating an online storefront, Two Peas offers its users a number of services that enhance and inspire their scrapbooking hobby. About 85% of scrapbookers are married women between the ages of 30 and 59 and the single largest catalyst to begin scrapbooking is the birth of a child.
Jonathan Graff, President of Kaboose stated, "The acquisitions of both BabyZone and Two Peas will add approximately 2.5 million unique users, 6 million visits and over 50 million page views per month to Kaboose. As the trend towards online consumption of media increases, we believe Kaboose is in a truly unique position to capitalize on the enormous growth opportunities in our sector."
About Kaboose Inc.
Kaboose (http://www.kaboose.com/), the largest independent online media company focused on kids and families, features over 12,000 pages of content for parents and over 1,000 games and educational activities for kids. Kaboose entertains, informs and educates millions of kids and parents every month and helps some of the world's leading brands reach this coveted audience. Kaboose trades on the Toronto Stock Exchange under the trading symbol "KAB".
This document may contain forward-looking statements, relating to Kaboose Inc.'s operations or to the environment in which it operates, which are based on Kaboose Inc.'s operations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, and/or are beyond Kaboose Inc.'s control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. Consequently, readers should not place any undue reliance on such forward- looking statements. Kaboose Inc. disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
This is not an offer for sale, or a solicitation of an offer to buy, in the United States or to any U.S. Person (as defined in Regulation S under the U.S. Securities Act of 1933, as amended (the "Securities Act") of any equity shares or any other securities of Kaboose Inc. Securities of Kaboose are traded on the Toronto Stock Exchange. Kaboose's securities have not been registered under the Securities Act or under any state or other securities laws. Its securities may not be offered or sold in the United States absent registration under the U.S. securities laws or unless exempt from registration under such laws. This does not constitute, and should not be construed as, "general solicitation or general advertising" as defined under Regulation D of the Securities Act, or "directed selling efforts" under Regulation S of the Securities Act.
