Onstream Media Corp. Signs Definitive Agreement to Acquire Narrowstep
Posted on May 30, 2008
Filed Under Digital Entertainment / Blogtainment, Digital Video
Onstream Media Corporation Signs Definitive Agreement to Acquire Narrowstep Inc. Acquisition Combines Leading Technologies to Provide a ComprehensiveInternet TV and IPTV Offering
POMPANO BEACH, Fla., May 30 /PRNewswire-FirstCall/ — Onstream Media
Corporation (Nasdaq: ONSM), a leading online service provider of live and
on-demand internet video, announced today that it has signed a definitive
merger agreement to acquire Narrowstep(TM) Inc. (OTC Bulletin Board: NRWS),
the “TV on the Internet Company” and a leading provider of Internet TV and
IPTV (Internet Protocol Television) services. The combination of
Narrowstep’s automated IPTV platform, Telvos(TM), and Onstream’s Digital
Media Services Platform (DMSP) is expected to result in a single
comprehensive platform with a unique ability to acquire, store, manage,
process, protect, monetize and deliver, digital broadcast quality video to
TV’s, computers, iPods, mobile phones, etc.
In the transaction, the shareholders of Narrowstep will receive 11.1
million shares of Onstream Media common stock plus the opportunity to earn
up to an additional 8.9 million Onstream Media shares subject to
Narrowstep’s business achieving substantial revenue growth targets during
the 18 months following the acquisition. The acquisition is expected to
close in approximately 90-120 days, subject to shareholder approval. Both
companies have agreed to immediately execute a restructuring plan designed
to significantly reduce or eliminate substantial costs related to
Narrowstep’s facility leases, SG&A expenses, public company and
headquarters costs, and other professional fees and services. As a result,
Onstream expects that Narrowstep will generate operating cash flow on a
standalone basis soon after the closing.
“Since the founding of Onstream Media our strategic direction has been
predicated on capitalizing on the integration of video-on-the-web and
broadcast television, making web-based programming indistinguishable from
over-the-air, cable or satellite-originated programming,” said Randy
Selman, president and Chief Executive Officer of Onstream Media. “With the
addition of Narrowstep, we now have a full suite of enabling technologies
to address this emerging market requirement. We believe that the
combination of Narrowstep’s automated IPTV platform and Onstream’s advanced
capabilities in meta-tagging, optimization, indexing and classification
will solidify our leadership position within the industry making Onstream
even more attractive to a wide- range of potential partners, including
telecom, satellite and cable companies, and hardware vendors. We are very
excited about the opportunities before us.”
Mr. David C. McCourt, Chairman and interim CEO of Narrowstep, stated,
“I have always believed that Narrowstep had the highest-quality Internet TV
technology, as well as the best tools for monetizing content on the web.
The synergies that we expect to be realized between Narrowstep’s
best-of-breed technology and Onstream’s product set and thousands of
corporate customers is expected to create a complete Internet-media
solution and winning combination for customers, employees and shareholders
of both companies.”
Narrowstep’s innovative and proprietary technology provides the
functionality to recreate the television-like experience either on the
desktop computer screen or through the home television, as well as the
ability to integrate with the new set top boxes and other IPTV
technologies, such as those developed by the CableLabs(TM) industry
consortium. Narrowstep offers its customers the expertise and technology to
move, manage and monetize video content across the Internet.
Narrowstep’s automated technology includes:
1. Playlist functions (the ability to string videos together to create 24
hour continuous feeds)
2. Channel management
3. A full suite of monetization tools including automated ad serving,
e-commerce, and payment processing options to manage video-on-demand,
pay-per-view, download and subscription models
4. Customizable player technology, including cross-platform and
cross-browser support and GUI-rich community functions utilizing
Microsoft Silverlight technology
5. Digital Rights Management including geographic restrictions
6. Complete content syndication capabilities
7. Distribution tools including search-engine optimization, automated RSS
feeds, and embedded video technology
Mr. Selman continued, “This acquisition will not only expand our
already deep technological offering, but will also enable us to sell our
products through a talented, established sales group in Europe along with
the added capability to cross-sell Narrowstep’s products and services
through our existing sales channels domestically. Since Narrowstep’s team
is familiar with digital media products and services, we anticipate a rapid
integration. Narrowstep possesses a diverse and well-known customer base,
including ITV, Fox International, Outdoor Channel, Torque TV, Georgetown
University, Vivocom and All My Children (Agnes Nixon), as well as a strong
pipeline of new business. We expect that this combination will not only
significantly improve our competitive position but will also result in a
strengthened cash position, revenue growth and opportunities to expand our
overall margins.”
About Narrowstep
Narrowstep(TM) Inc. (OTC Bulletin Board: NRWS), the TV on the Internet
Company, is a leading provider of Internet TV services supporting content
providers, broadcasters, telecommunications companies and corporations
worldwide. Narrowstep’s proprietary technology platform delivers the
highest quality, TV-like experience available on the Internet. A pioneer in
delivering Internet TV, Narrowstep offers the expertise and technology to
move, manage and monetize video content across the Internet. For more
information about Narrowstep, please visit http://www.narrowstep.com.
About Onstream Media:
Onstream Media Corporation (Nasdaq: ONSM) is a leading online service
provider of live and on-demand internet video, corporate web communications
and content management applications. Onstream Media’s pioneering Digital
Media Services Platform (DMSP) provides customers with cost effective tools
for encoding, managing, indexing, and publishing content via the Internet.
The DMSP provides our clients with intelligent delivery and syndication of
video advertising, and supports pay-per-view for online video and other
rich media assets. The DMSP also provides an efficient workflow for
transcoding and publishing user- generated content in combination with
social networks and online video classifieds, utilizing Onstream Media’s
Auction Video(TM) (patent pending) technology. In addition, Onstream Media
provides live and on-demand webcasting, webinars and web and audio
conferencing services. In fact, almost half of the Fortune 1000 companies
and 78% of the Fortune 100 CEOs and CFOs have used Onstream Media’s
services.
Select Onstream Media customers include: AOL, AAA, AXA Equitable Life
Insurance Company, Bonnier Corporation, Dell, Deutsche Bank, Disney,
National Press Club, NHL, MGM, PR Newswire, Rodale, Inc., Televisa,
WireOne, Shareholder.com, and the U.S. Government. Onstream Media’s
strategic relationships include Akamai, Adobe, eBay, FiveAcross/Cisco and
Qwest. For more information, visit Onstream Media at
http://www.onstreammedia.com or call 954-917-6655.
Cautionary Note Regarding Forward Looking Statements
Certain statements in this document and elsewhere by Onstream Media and
Narrowstep Inc are “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Such information
includes, without limitation, the business outlook, assessment of market
conditions, anticipated financial and operating results, strategies, future
plans, contingencies and contemplated transactions of the company. Such
forward- looking statements are not guarantees of future performance and
are subject to known and unknown risks, uncertainties and other factors
which may cause or contribute to actual results of company operations, or
the performance or achievements of the company or industry results, to
differ materially from those expressed, or implied by the forward-looking
statements. In addition to any such risks, uncertainties and other factors
discussed elsewhere herein, risks, uncertainties and other factors that
could cause or contribute to actual results differing materially from those
expressed or implied for the forward- looking statements include, but are
not limited to fluctuations in demand; changes to economic growth in the
U.S. economy; government policies and regulations, including, but not
limited to those affecting the Internet. These risks and uncertainties also
include the risk that the acquisition does not close, including the risk
that required shareholder and regulatory approvals for the acquisition may
not be obtained; the risk that the Internal Revenue Service may determine
that the acquisition does not qualify as a reorganization for federal
income tax purposes; diversion of management’s attention away from other
business concerns; the risks associated with the development, generally, of
the combined company’s overall strategic objectives; the ability of the
combined company to build additional value in its business; the existence
of unanticipated technical, commercial or other setbacks related to the
combined company’s products and services. Onstream Media and Narrowstep
Inc. undertake no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events or
otherwise. Actual results, performance or achievements could differ
materially from those anticipated in such forward-looking statements as a
result of certain factors, including those set forth in Onstream Media
Corporation’s or Narrowstep Inc.’s filings with the Securities and Exchange
Commission.
Additional Information and Where to Find It
Onstream plans to file with the SEC a registration statement on Form
S-4 in connection with the proposed transaction, which will include
Narrowstep’s proxy statement and Onstream’s proxy/prospectus for the
proposed transaction. THE REGISTRATION STATEMENT AND THE DEFINITIVE JOINT
PROXY STATEMENT/PROSPECTUS WILL CONTAIN IMPORTANT INFORMATION ABOUT
ONSTREAM AND NARROWSTEP, THE TRANSACTION AND RELATED MATTERS. INVESTORS AND
SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE
DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS CAREFULLY WHEN THEY ARE
AVAILABLE. Free copies of the registration statement and the joint proxy
statement/prospectus and other documents filed with the SEC by Onstream and
Narrowstep can be obtained through the web site maintained by the SEC at
http://www.sec.gov. In addition, free copies of the registration statement and the
joint proxy statement/prospectus will be available from Onstream by
contacting Onstream at (954) 917-6655 or http://www.onstreammedia.com or from
Narrowstep by contacting Narrowstep at (609) 945-1760 or http://www.narrowstep.com
or by directing a request when such a filing is made to Narrowstep, 116
Village Blvd Suite 200, Princeton, NJ 08542.
Media Relations: Investor Relations:
Chris Faust Brett Maas
FastLane Communications Hayden Communications
973-226-4379 646-536-7331
cfaust@fast-lane.net brett@haydenir.com
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