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MOOD MEDIA to acquire MUZAK FOR US$345 million

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Mood Media Corporation logoCombination Creates Global In-Store Media Powerhouse in 470,000 Commercial Locations Worldwide

Mood Media Corporation (ISIN: CA61534J1057)  (TSX:MM/ LSE AIM:MM), a leading in-store media specialist, today announced it has entered into a definitive agreement to acquire Muzak Holdings LLC (“Muzak”), a privately-held company that is the leading provider of sensory branding services for business in the United States, for US$345 million including net debt to be repaid on closing.

Based in Fort Mill, South Carolina, Muzak is the premier provider of a full range of brand enhancing products. Its top-tier background and foreground music, voice and digital offerings reach more than 100 million people every day. In 2010, Muzak had US$195 million in revenue and US$55 million in EBITDA. More than 75 percent of Muzak’s revenue is associated with multi-year customer contracts.

Mood Media’s acquisition of Muzak will create a global in-store media provider servicing over 470,000 commercial locations in over 39 countries. In the U.S., the combined business will serve over 200,000 national and 100,000 franchisee locations. The combined customer base will include more than 850 U.S. and international brands in diverse market sectors that include retail (food, fashion, cosmetics), leisure and hotels, oil and gas, telecommunications, financial institutions, and fast food. Together Mood Media and Muzak will have an extensive music library that includes 1.7 million rights-included tracks and more than 30,000 original recordings, which means customers will benefit from greater product choice.

The combined company will have trailing last twelve months (LTM) pro forma revenue of approximately US$400 million and trailing LTM pro forma EBITDA in excess of US$100 million. Over 60% of the combined company’s revenue will be recurring subscription revenue, with a new contract life of three to five years.

“This acquisition creates a new global leader with the geographic footprint, top-tier brand relationships and track record of innovation to compete and succeed in a dynamic marketplace,” said Lorne Abony, CEO & Chairman of Mood Media Corporation. “Over the past five years, Mood Media has transformed the in-store media industry by offering unparalleled innovation and convenience to our customers across the world. We now have the opportunity to extend this legacy to a world-recognized brand and create a truly global leader with U.S. headquarters in the Charlotte area. We see attractive opportunities for profitable growth through cross-selling Mood Media’s products to Muzak’s existing customers, expanding into adjacent markets and adjusting Muzak’s distribution system to our industry-leading internet-based technology.”

Steve K. Richards, Chief Executive Officer of Muzak said: “We are delighted to join together with Mood Media, an innovative global leader that is revolutionizing the consumer experience.

This combination will offer sophisticated new and expanded solutions and opportunities for our customers and employees. As part of Mood Media, we will continue delivering unique experiences to millions of people daily.”

Mood Media intends to maintain a significant presence in the Charlotte, North Carolina area, with its U.S. headquarters in Fort Mill, South Carolina.

Mood Media will finance the transaction with approximately US$480 million of debt, including the refinancing of Mood Media’s existing debt. The financing commitment is comprised of a US$25 million 5-year revolving credit facility (unfunded at close), US$390 million 7-year first lien term loan and a US$65 million 7.5-year second lien term loan. Subject to certain provisions, the credit facilities allow Mood Media to raise incremental senior secured term loans of up to $100 million. Credit Suisse Securities (USA) LLC provided the committed financing for the transaction. The acquisition will be immediately accretive to Mood Media shareholders.

The consideration for the acquisition, which is expected to close during the second quarter, is to be satisfied on completion as to (i) approximately US$305 million in cash, (ii) by the issue of US$5 million 10% convertible unsecured subordinated debentures having an exercise price of US$2.43 per common share and maturing on October 31, 2015, and (iii) as to remainder, by the grant of warrants to purchase  4,407,543 common shares of Mood Media (representing approximately 3% of Mood Media’s fully diluted common shares), at an exercise price of US$3.50 and expiring five years from the date of issuance. Further consideration of a maximum of up to US$30 million in cash may be paid over the three years following closing in the event Mood Media achieves certain minimum EBITDA targets during such period. The acquisition remains subject to customary closing conditions.

About Mood Media Corporation
Mood Media Corporation (TSX:MM/ LSE AIM:MM) is a leading in-store media specialist that uses a mix of music, visual and scent media to help its clients communicate with consumers with a view to driving incremental sales at the point-of-purchase.

Operating through its two principal divisions; In-Store Media and Retail Point-of-Purchase, Mood Media Corporation works with more than 800 retail chains in more than 30 countries throughout North America, Europe, Asia and Australia.

Mood Media Corporation was formed in June 2010, following the acquisition of Mood Media Group SA by Fluid Music Canada, Inc. Through its subsidiaries Mood Media and Somerset Entertainment., Mood Media Corporation is driving growth of in-store media solutions across multiple markets.

Mood Media Corporation operates an international in-store media and music retail business with an extensive geographic footprint and a broad client base including several multinational blue chip organizations.

For more information on Mood Media Corporation visit www.moodmedia.com.

About Muzak

For over 75 years, Muzak has been at the forefront of the sensory branding industry. By acquiring, designing and delivering rich media-based solutions to clients worldwide, its services reach 100 million people every day. Through a national sales and service network, Muzak designs, delivers and installs custom music, voice messaging, Digital Signage networks, leading drive-thru equipment and professional sound systems to a variety of clients in multiple industries including retail, hospitality and restaurant.

For more information, visit www.muzak.com


Patrick Fitzgibbons
Fleishman-Hillard (New York)
Tel: +1 212 453 2124
E-mail: Patrick.fitzgibbons [at] fleishman.com

Alan O’Sullivan
Fleishman-Hillard (London)
Tel: +44 020 7395 7017
E-mail: alan.osullivan [at] fleishmaneurope.com

Dominic Morley
Panmure Gordon
Tel: +44 207 459 3600

Source: Mood Media Corporation

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