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Thursday, August 31, 2006

Focus Media Goes to the Movies

I wrote a few days ago that Focus Media (FMCN), China's largest LCD advertising network, would be entering the movie business. The company just announced the deal. Focus Media will be acquiring Appreciate Capital Limited.
Under its contracts with movie theatres, ACL has the right to three minutes of screen time prior to the screening of each movie shown in the theatre. Under the terms of the share purchase agreement, we made an initial deposit payment of $2.8 million to the shareholders of ACL upon signing.
As with all of Focus Media's deals to date, there is an earnout provision. Focus Media did not disclose the details of the earnout.
We will pay the shareholders of ACL additional earn-out payments calculated according to their attainment of certain earnings targets in respect of each of the years ending August 31, 2006, 2007 and 2008.
Focus Media has been fairly aggressive lately in terms of acquisitions.

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