CGI Holding Corporation Signs Letter of Intent to Acquire PrimaryAds, a Leading Affiliate Marketing Company
Accretive Acquisition Will Broaden Company`s Existing Online Marketing and Advertising Presence
LAKE BLUFF, Ill.--March 8, 2005-- CGI Holding Corporation, which plans to seek shareholder approval to change its name to Think Partnership Inc. (AMEX: THK - News; "Company"), today announced that the Company has entered into a letter of intent to merge, through a wholly-owned subsidiary, with privately-held PrimaryAds Inc. ("PrimaryAds"). Located in North Plainfield, New Jersey, PrimaryAds is a leading provider of affiliate marketing services that connects website publishers with online advertisers.
The Company intends to acquire all of the stock of PrimaryAds in exchange for $10 million in cash. The shareholders of PrimaryAds can also earn up to $3 million in additional cash and up to $13 million of common stock of the Company, contingent upon the aggregate pre-tax income of PrimaryAds during the first twelve full calendar quarters following the closing of the merger achieving levels ranging from $6.5 million to $20 million. The Company also plans to issue to stockholders and employees of PrimaryAds options to purchase an undisclosed number of shares of common stock of the Company. The merger is expected to be immediately accretive to the earnings of CGI Holding Corporation.
The closing of the proposed transaction is subject to the satisfaction of a number of conditions, including the completion of due diligence, the completion of an audit of PrimaryAds, the execution of mutually acceptable definitive documentation, Board of Director approvals, and other customary conditions.
Gerard M. Jacobs, the Company`s CEO, stated, "Think Partnership is excited to announce our entrance into affiliate marketing, which is one of our primary expansion targets for 2005. Ken Harlan and his team will be tremendous partners for us in this extremely important online marketing and advertising space. We expect that, at its current run rate, PrimaryAds will add $4 million or more to our annual pre-tax income, and therefore we expect that the shareholders of PrimaryAds will earn most if not all of the $16 million earnout portion of the merger consideration."
Scott Mitchell, the CEO of the Company`s Cherish subsidiary, stated, "Think Partnership is positioned to benefit greatly from the digital Renaissance occurring around us due to the Internet: our WebSourced subsidiary is already the worldwide leader in search engine optimization, our Cherish subsidiary is a leader in online dating and relationship websites, and now PrimaryAds will make us a leader in affiliate marketing. Our internal growth in these businesses, combined with other acquisitions that we expect to announce during the next few months, will significantly expand our online advertising and marketing presence, and in selected online verticals."
Steven "Pat" Martin, the CEO of the Company`s WebSourced subsidiary, added, "Affiliate marketing continues to be one of the fastest growing revenue generating channels for companies of all sizes. This partnership provides a unique opportunity for WebSourced`s clients to take advantage of one of the leading affiliate marketing service providers while allowing PrimaryAds` clients to benefit from our world-class search marketing services."
Ken Harlan, the CEO of PrimaryAds, stated, "After carefully considering all of the many options available to us, we have decided to join Think Partnership Inc. This merger will allow our business to continue its rapid growth, without any disruptions, as part of a collaborative partnership of profitable online and offline advertising and marketing businesses."
This transaction was initiated and negotiated by Cherie Homa of KPMG Corporate Finance LLC.
Until its name change is approved by shareholders, CGI Holding Corporation intends to d/b/a Think Partnership Inc. The Company is based in Lake Bluff, IL (see www.cgiholding.com) and currently has six subsidiaries: WebSourced, Inc., Morrisville, NC, a leader in search engine optimization and pay-per-click campaign management (see www.websourced.com and www.keywordranking.com); MarketSmart Advertising, Inc., Rightstuff, Inc. d/b/a Bright Idea Studios, and Checkup Marketing, Inc., Raleigh, NC, providing world-class off-line advertising, public relations, marketing, branding and shopping evaluation services (see www.marketsmart.net, www.brightideastudios.com and www.checkupmarketing.com); Cherish, Inc., Clearwater, FL, a leading online dating company (see www.cherish.com); and Ozona Online Network, Inc., Clearwater, FL, providing a comprehensive scope of online services including start to finish web design, custom web based applications, database systems, managed and shared hosting solutions, e-commerce, and high-speed business Internet access (see www.ozline.net). The Company has also entered into an agreement to merge with privately-held Meandaur, Inc. d/b/a Proceed Interactive, a full service marketing and communications agency with a core competency in search marketing, which has offices in Chicago, Dallas and Los Angeles (see www.proceedinteractive.com).
Statements made in this press release that express the Company`s or management`s intentions, plans, beliefs, expectations or predictions of future events, are forward-looking statements. The words "believe", "expect", "intend", "estimate", "anticipate", "will" and similar expressions are intended to further identify such forward-looking statements, although not all forward-looking statements contain these identifying words. Those statements are based on many assumptions and are subject to many known and unknown risks, uncertainties and other factors that could cause the Company`s actual activities, results or performance to differ materially from those anticipated or projected in such forward-looking statements. Other factors that could cause the Company`s actual activities, results or performance to differ materially include risks and uncertainties relating to: limited operating history; new business model; historical losses; volatile stock price; difficulty of identifying and closing acquisitions; potential dilution; difficulty integrating acquisitions; difficulty managing growth; availability of skilled labor; dependence on key personnel; lack of long-term contracts; lack of brand awareness; dependence on Internet and telecommunications infrastructure; regulations; dependence on Internet and search engines; competition; future of search engine optimization; taxation; numerous online dating industry risks; need to attract paying members; member acquisition costs; rapid technological change; service interruptions; dependence on affiliates and third party providers; information liability; hurricanes and other catastrophes; issues regarding adult content; physical and emotional safety of users; security breaches; viruses; credit card fraud; protection of intellectual property; insider control; no dividends; provisions of Nevada law; and other factors and risks discussed in the Company`s filings with the Securities and Exchange Commission. The Company cannot guarantee future financial results, levels of activity, performance or achievements; and investors should not place undue reliance on the Company`s forward-looking statements. The forward-looking statements contained herein represent the judgment of the Company as of the date of this press release, and the Company expressly disclaims any intent, obligation or undertaking to update or revise such forward-looking statements to reflect any change in the Company`s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.
Contact:
CGI Holding Corporation
Gerard M. Jacobs
847-615-2890
gjacobs@cgiholding.com
WordSmith Communications
Glenna Musante
800-849-2118, ext. 126
gmusante@marketsmart.net
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