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SilverBirch to Acquire Lighthouse Interactive

by Rainier on April 28, 2008 @ 4:38 a.m. PDT

Digital media company SilverBirch Inc., known for announced an agreement to acquire Netherlands-based Lighthouse Interactive with offices in Montreal, Toronto and London, England.

This immediately accretive acquisition is a first step in SilverBirch's stated strategy of building an integrated video game company. The acquisition will improve the fundamentals of SilverBirch by adding to both revenues and profitability of the company.

"The strategic significance of expanding into publishing can't be overemphasized," commented Derek van der Plaat, SilverBirch CEO. "Being a developer and a publisher will allow us to further diversify our revenue streams and capture a greater proportion of the video game industry value chain."

"The synergies between our two companies made the decision to become part of SilverBirch an easy one for us. This deal will help Lighthouse to further develop our business and access vertical market opportunities as we continue to expand the Lighthouse brand," said Steve Wall, Executive VP and co-founder of Lighthouse Interactive.

SilverBirch intends to acquire all of the outstanding shares of Lighthouse for a purchase price of up to CAD $4.0 million payable by way of $1.25 million in cash, a $400,000 vendor note, 3.85 million common shares of SilverBirch, and an earn-out based on fiscal 2008 financial performance. The transaction is subject to further due diligence and formal approval of the TSX Venture Exchange and SilverBirch board.

In other business, the company announced the cancellation and return to treasury of 500,000 common shares held in escrow for ZIM Corporation, due to that company's inability to deliver a customer forming part of the July 2007 asset purchase. The Board has also approved the deferral of the previously announced Hip Pocket debenture financing following mutual agreement to allow that company to gain more customer traction before revisiting a funding discussion with its principals.

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