Private Media Group (PRVT) to Acquire Sureflix Digital Distribution

October 14, 2009 10:23 AM EDT

Private Media Group, Inc. (Nasdaq: PRVT) announced today that it has signed a definitive agreement to acquire Sureflix Digital Distribution, the world leader in digital distribution of premium gay content and owners of male flixxx. tv, splashshots.com, as well as its extensive international affiliate platform, in exchange for common stock of Private.

The acquisition extends PMG's position as the leading global distributor of premium adult content and gives the company a leadership position in a key vertical market. This acquisition follows the January acquisition of Gamelink, a global leader in VOD, and adds a new market segment to PMG's enviable distribution channels in IPTV, Broadcast, Mobile, and DVD.

The definitive acquisition agreement was signed on October 9, 2009 and the transaction is expected to close in November 2009. The acquisition agreement provides for the issuance of 3,900,000 unregistered shares, or 6% of total shares outstanding following issuance, of Private common stock to the owners of Sureflix and related companies upon completion of the acquisition, and up to an additional 2,100,000 shares of Private common stock based on earnout targets.

The combined pro-forma revenue of the two entities for the six months ending June 30, 2009 was USD 19.3 million compared to USD 16.0 million in revenue for the same period for Private alone, a 21% difference.

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