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–Plans to Merge with Spain’s Fresh Interactive Technologies
–New Company to be Called "Mirada"
–YooMedia Renews Interactive Playout Deal with Red Bee

UK-based interactive TV company, YooMedia, has announced a major corporate reorganization that will see it, among other things, acquiring Spanish interactive TV company, Fresh Interactive Technologies; raising £12.9 million; settling debts with two of its lenders, Highbridge and Platinum; selling its YooMedia Dating Group subsidiary (trades under the brand, Dateline); and changing its name to Mirada. The various elements of the reorganization will have to be approved by the company’s shareholders at an extraordinary general meeting, and some elements are subject to regulatory approval.

The company–which concedes that it "has found it difficult to achieve profitability in the UK market" and that, as a result, its "balance sheet has become weak"–is hoping to raise the £12.9 million via 1) an £8.6 million placement of new ordinary shares of £1 each, at £1.0962 per share, mainly with Kasei 2000, a special investment vehicle which earlier this year was granted an option to acquire the company’s games and gambling business; and 2) a £4.3 million investment in Fresh by Baring Private Equity Espana, which would be completed prior to YooMedia’s acquisition of the Spanish ITV company. YooMedia says it would use the funds to strengthen its balance sheet (it owes Highbridge and Platinum around £5 million), develop new products and services, and finance its international expansion. The company’s deal with Kasei could result in the latter owning as much as 43.06% of its enlarged share capital (in which case, a waiver of Rule 9 of the UK’s Takeover Code would be required). However, it says it is in negotiations with "an unrelated third party" that is also interested in the placement, and that those negotiations could result in Kasei owning less than 30% of its enlarged share capital (in which case, the Rule 9 waiver would not be required).

The acquisition of Fresh–which was founded in 2000 by its current management team, and which has 28 employees–will see YooMedia acquiring at least a 95.2% stake of the issued share capital of the Spanish company for £6.45 million (the price will rise to £6.775 million, if YooMedia buys a 100% stake in the company). Fresh conducts sales and marketing activities primarily in Spain, the UK and Latin America, and its customers include Digital+, Euskaltel and Jazztel in Spain; BSkyB, ITV and Music Choice in the UK; and Disney Television International, Universal Studios Network and Warner Bros. According to YooMedia, its technology is widely deployed on digital set-top boxes in Spain. The company has five main product offerings: 1) startv, which provides basic interactive functionality, such as an EPG, an operator information portal, system configuration, news and other information services; 2) entertv, which allows operators to generate their own custom participation TV services (including voting and contests) that can be accessed through different devices, such as mobile phones; 3) grouptv, which is designed to create community environments around programs, events and channels via instant messaging, SMS/MMS, forums, email and chat; 4) challengetv, which is designed to enable operators to offer interactive gaming and betting services that, if desired, integrate TV with Internet and mobile phone; and 5) managetv, which allows operators to capture information on registered users and thereby offer those users personalized services. In 2006, Fresh’s revenues totaled €2.0 million and generated €96,000 in profits, and in the first nine months of 2007 (according to unaudited figures), its revenues totaled €1.4 million and generated €50,000 in profits. As of September 30th, the company had net assets of €0.7 million.

The acquisition of Fresh and the investment by Kasei, if approved, will result in a number of changes to YooMedia’s (Mirada’s) senior management team: while Michael Sinclair will remain chairman of the merged entity, its CEO will be Fresh CEO, Luis Vazquez; YooMedia managing director, Neil MacDonald, will become its COO; and Kasei 2000 director, Rafael Martin Sanz, will join its board as a non-executive director.

The various moves that are being proposed by YooMedia will result in a reorganization of its capital structure: each issued and unissued ordinary share of 1p will be subdivided into one ordinary share of 0.1p and nine A deferred shares of 0.1p each. Every 1,000 subdivided shares will then be consolidated into one new ordinary share of £1. All share warrants and options that have been issued by the company will be consolidated on the same basis. Following the consolidation, there will be 912,242 new ordinary shares in issue, and YooMedia is proposing that its authorized share capital be increased to £30 million.

In other YooMedia news: the company says that Red Bee Media has upgraded the YooMedia xPlayer interactive playout system which it originally installed in 2002 and which it uses to power red-button interactive TV programming and advertising for its customer, UKTV (note: other broadcasters that use xPlayer to drive interactive playout include Channel 4, Five and S4/C). According to YooMedia, the upgraded version of xPlayer is "more intelligent" in its allocation of bandwidth, thus allowing broadcasters to "fit greater interactivity into less bandwidth"; the system recognizes when interactive elements are about to be broadcast, the company says, and ensures that all relevant data is delivered to the satellite at the point of broadcast. The company touts it as serving as "an automated interactive scheduling system that integrates seamlessly with the client’s existing broadcast environment." Although xPlayer is currently used primarily on the Sky platform, it can be used to deliver to other digital platforms–it is, for example, used to deliver interactive ads to the UK’s free-to-air digital terrestrial platform, Freeview. It can also be used to update content on Web sites, or to trigger the sending of SMS messages that serve as invitations to participate and interact.

Orginally published in Issue 7.58 Part 1  January 14, 2008  Subscribe: http://www.itvt.com