BEIJING, (Hurray! Holding Co., Ltd.) - Hurray! Holding Co., Ltd., a leading provider of advanced wireless value-added services and mobile telecommunication network software in the People's Republic of China, today announced the signing of definitive agreements to acquire a major interest in the music business ("Freeland Music") of the
Freeland Group, which is a group of affiliated companies in China that is engaged in the production and distribution of audio and video media products.
Freeland Music specializes in music production and distribution for its portfolio of artists which includes some of the most popular singers in China, such as Xiangxiang, Yang Chengang and Yang Yi. Many songs produced by
Freeland Music and its artists, such as "Zhu Zhi Ge (Song of Pigs), " "Lao Shu Ai Da Mi (Mice Love Rice)," "Mei Er Ai Wo (Girl Love Me)," and "Hui Lai Wo De Ai (Come Back My Love),'' are not only top hits in ringtones, ring-back tones and digital downloads on mobile phones and the
Internet in China, but also appeared in Top 20 World list of Apple Computer's iTunes services for the month of October 2005.
In the acquisition, Freeland group will inject the music business into a newly formed company ("Hurray! Freeland"), which upon the closing of the acquisition will be 60% owned by Hurray! and 40% owned by Freeland group. The total consideration for the acquisition is US$7,560,000 in cash. Consideration payable by Hurray! and the respective ownership interests of the parties in Hurray! Freeland are subject to adjustment based on the financial performance of Hurray! Freeland following the closing of the acquisition. The transaction is expected to be accretive to Hurray!' earnings per share in 2006.
Hurray! currently expects the transaction to close before December 31, 2005, subject to required China regulatory approval and other customary closing conditions. Upon closing, pursuant to certain contractual arrangements, Hurray! will distribute Hurray! Freeland's music via wireless and Internet platforms, and Freeland group will distribute such music via offline channels, such as music stores.
Commenting on this acquisition, QD Wang, Chairman and Chief Executive Officer of Hurray!, said, "We are very pleased to announce this strategic partnership with Freeland group, a pioneer and leader in Internet as well as traditional music production and distribution in China. This will give us significant depth and breadth in music content and music production capabilities. It is a defining step for Hurray! in transforming into a leading digital music production and distribution house in China."
"This event marks the first time in China that a leading music production house joins hands with a leading digital music distribution company. Together, we will strive to redefine the music industry in China. We are thrilled to partner Hurray! in this endeavor," added Xiongbing Zhong, Chairman and Chief Executive Officer of Freeland group companies and to-be-established Hurray! Freeland.
China eCapital served as financial advisor to Hurray! in the transaction.
