According to the statement, Videomatic Canada has the second largest Canadian network of kiosks that rent and sell DVD movies and video games. The companies anticipate the definitive agreement for an all-stock transaction will be executed in the next six to eight weeks pending the completion of Public Media Works’s due diligence that is currently underway.
Unedited press release follows:
Public Media Works Executes Letter of Intent to Acquire “Second Largest” Kiosk-Based DVD Movie and Game Rental and Sales Company in Canada
Letter of Intent With VideomaticCanada Underscores PMW’s Growth Strategy to Complement Organic Growth With Targeted Acquisitions
SAUSALITO, CA and COCHRANE, AB–(June 29, 2010) – Public Media Works, Inc. (OTCBB: PUBM) today announced it has signed a Letter of Intent to acquire Cochrane, Alberta, Canada-based Mediamatic Ventures, Inc. (dba VideomaticCanada). The companies anticipate the definitive agreement for an all-stock transaction will be executed in the next six to eight weeks pending the completion of PMW’s due diligence that is currently underway.
According to the company’s CEO Jeremy Ostrowski, VideomaticCanada has the second largest Canadian network of kiosks that rent and sell DVD movies and video games. “With more than 67 DVD movie and game kiosk stores currently installed or being staged, and 25 more on order, we expect to have 92 kiosks up and running throughout Canada by August of this year,” said Ostrowski.
At its current growth pace, VideomaticCanada’s goal is to become the largest Canadian DVD kiosk network by the end of 2010, according to Ostrowski.
“VideomaticCanada — with its excellent installed base and visionary founder and CEO, Jeremy Ostrowski — fits our high-traffic and supermarket verticals plan to a ‘T,’” said Garrett Cecchini, Chairman and CEO of Public Media Works. “VideomaticCanada has developed a highly successful, kiosk-specific customer retention program, and its kiosk-based entertainment technologies are quite simply years ahead of anything I’ve seen in the industry. Combining our infrastructure, channel sales partners and content acquisition prowess with Videomatic’s operations will allow us to asymmetrically dominate specific territories and markets.”
According to information from VideomaticCanada, the company began installing fully automated DVD vending machine kiosks in 2006, targeting convenience locations that allow customers access 24/7. With a priority to stay ahead of the curve, the company reports that it is transforming from the traditional disk dispensing kiosk to also allow customers to acquire downloadable content to almost any music or PDA device. Customers can also view titles online and reserve or buy entertainment content at a location of their choice.
“Becoming part of Public Media Works will enable us to aggressively expand throughout Canada, multiplying our profitable kiosk operations from coast-to-coast,” Ostrowski said. “And I believe our years of early pioneering in technology and customer acquisition, as well as being a hands-on operator in the kiosk-based DVD movie and game space, will complement the new, combined company’s plan for growth and differentiation in the international marketplace. The bottom line is that this transaction with PMW is truly a ‘Win-Win’ for all.”
With the anticipated close of the deal, the parties have agreed that Ostrowski will have a seat on the board and will be a member of the senior management team of Public Media Works. The completion of the acquisition is subject to the negotiation and execution of a definitive acquisition agreement and the completion of the audit of VideomaticCanada. Public Media Works cannot provide any assurances that such an acquisition will be completed, or if completed, the timing of such completion.
About Public Media Works
Public Media Works, Inc. was founded as a forward-thinking entertainment company, created and operated by entertainment professionals, with the objective to discover, create, develop and distribute entertainment content to world audiences. The EntertainmentXpress subsidiary of Public Media Works is rolling out a network of conveniently located self-service kiosks which deliver demographically relevant digital media content to consumers. The company’s core business model focuses on the high-volume rental and sale of DVD movies, video games and other media through kiosks located in quick-serve restaurants, grocery stores and other high-traffic, public venues. Features intended to differentiate EntertainmentXpress in the marketplace are expected to include a broader variety of digital product offerings over time, retail partner branded kiosks, a fully integrated solution for in-store advertising, and kiosks designed to be converted into media filling stations to a variety of digital storage devices.