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Strategy First Parent Company Wants to Acquire Empire Interactive

by Rainier on Oct. 30, 2006 @ 6:54 a.m. PST

Silverstar Holdings, who currently own Strategy First, announced that it had submitted a definitive offer to acquire all the shares of Empire Interactive. The acquisition is pending approval of the shareholders, which ends late November.

The offer calls for either a cash payment of 7p (approx. $0.13) per share on closing or an earn-out alternative where the initial payment will be 4.9p (approx. $0.09) per share with a further 5.1p (approx. $0.094) per share payable subject to certain conditions on October 31, 2007. The earn-out alternative also includes further incentive payments subject to Empire achieving certain EBITDA targets for the year ended June 30, 2007.

"This is a landmark transaction for Silverstar. Empire has approximately $50 million in trailing revenues during its last 15-month reporting period. This acquisition combined with Strategy First propels Silverstar into the leading rank of independent interactive entertainment software publishers. The acquisition will provide consistent revenue growth over the next few quarters. We look forward to working with the Empire management team to aggressively grow their business and the business of Strategy First, both organically and through future acquisitions. We remain determined to create greater value for our shareholders. This acquisition is a main component of our long-term strategic plan," stated Clive Kabatznik, Chief Executive Officer of Silverstar Holdings.

Should all Empire shareholders other than management elect to receive the 7p cash payment, the maximum amount due on closing will be approximately $7.2 million. Should all shareholders elect the earn-out alternative, the maximum amount due on closing will be $6.15 million with an additional $6.4 million due in a second payment on October 31, 2007 with further incentive payments due on April 30, 2008 subject to Empire achieving certain EBITDA targets for the year ended June 30, 2007.

Empire's two principal shareholders have given irrevocable undertakings to vote their 62% shareholdings in favor of the earn-out alternative. The offer will be open to shareholders for 21 days. The transaction is expected to close in late November.

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