CGI Holding Corporation Enters Into Letter of Intent to Merge With MarketSmart Companies
Wednesday November 17, 10:57 am ET
Combination Will Create Powerful Synergies Between Online and Offline Marketing Services Firms and Will be Immediately Additive to Earnings
LAKE BLUFF, Ill.--(BUSINESS WIRE)--Nov. 17, 2004-- CGI Holding Corporation (OTCBB:CGIH - News; the "Company") today announced that the Company has entered into a letter of intent to merge with privately-held MarketSmart Advertising, Inc., Rightstuff d/b/a Bright Idea Studios, and Checkup Marketing, Inc. (the "MarketSmart Companies"). Based in Raleigh, North Carolina, the MarketSmart Companies provide world-class advertising, marketing, branding, public relations, and shopping evaluation services. Founded in 1995, the MarketSmart Companies have realized steady, profitable growth and are expected to have 2004 revenues in excess of $8 million. The MarketSmart Companies have 46 full-time employees, and maintain more than 30 accounts, including Subway Sandwich franchise groups (30 plus local markets) and Bowe Bell + Howell. Co-founders Gregory J. Cox, Lewis Finch III and Steven Thanhauser will continue to lead the MarketSmart Companies following the closing.
The Company intends to acquire all of the stock of the MarketSmart Companies in exchange for $3 million plus one million shares of restricted common stock of the Company. The Company also plans to issue to stockholders and employees of the MarketSmart Companies warrants to purchase an aggregate of approximately 140,000 shares of common stock of the Company. The merger is expected to be immediately additive to the earnings of CGI Holding Corporation, which has recently announced financial guidance of $0.04 - $0.05 per share for the fourth quarter of 2004, and $0.20 - $0.25 per share for 2005.
The closing of the proposed transaction is subject to the satisfaction of a number of conditions, including the execution of definitive merger and employment agreements, the completion of audits of the MarketSmart Companies, and other customary conditions.
Gerard M. Jacobs, the Company's CEO, stated "The MarketSmart Companies are all about highly professional, extremely talented people making it happen for their clients. We are excited about the prospect of Greg Cox, Lewis Finch and Steve Thanhauser becoming our partners in helping us build a worldwide leader in offline and online marketing, advertising and public relations. This merger will allow our WebSourced subsidiary and MarketSmart to significantly expand their client bases, by providing compelling, cost-effective online and offline marketing services."
Steven "Pat" Martin, the CEO of the Company's WebSourced subsidiary, stated, "Combining MarketSmart's traditional advertising and marketing with WebSourced's search engine marketing services will allow us to offer a truly integrated service. We already believe that WebSourced provides online marketing services that offer unmatched levels of return-on-investment; by joining with MarketSmart, we will be able to offer our clients a heuristic, impartial view of their complete campaign." Martin added, "Never before has a search engine marketing company been able to offer truly compelling offline marketing services. WebSourced and MarketSmart will emerge as a new leader in both interactive marketing and traditional advertising."
Steven Thanhauser, the CEO of the MarketSmart Companies, stated, "We are so excited with the natural symbiotic relationship that will take place with WebSourced and MarketSmart when this merger occurs. It is incredibly powerful and trendsetting for the advertising industry. Combining MarketSmart's traditional "offline" full service agency strengths with the WebSourced "online" services will allow us to offer a turnkey solution for a much broader range of clients."
CGI Holding Corporation, based in Lake Bluff, Illinois (see www.cgiholding.com) currently has one subsidiary, WebSourced, Inc., Morrisville, North Carolina, a leader in search engine optimization, pay-per-click campaign management, and online dating (see www.websourced.com, www.keywordranking.com and www.cherish.com).