MOMO'S BREAKOUT BOARD

[giaiv22]

<<$SMCE Potential buyout target >>>> By INgrooves???, especially when taking into consideration their most recent venture in acquiring Fontana in 2012 which SMCE's Kurt Heidolph was an integral part of Fontana..

TWEETS FROM SMCE YESTERDAY TOLD US THEY WERE IN MEETINGS WITH INgrooves!!!!

https://twitter.com/SMCEUSA/status/601807766940966913

https://twitter.com/SMCEUSA/status/601829763859230720

Earlier this year, and throughout- plus their website- SMCE told us/telling us that
• They are pursuing a new business plan
• Strive to be a One Stop Shop for artist
• Distribution Distribution "Pipeline"
• Targeting India and Latin America which is "untapped" for digital distribution.
• Added Russ Regan (a legend) to their advisory board.

NOTE: there is significant similarities between $SMCE and Fontana (which INgrooves bought out) as it appears the same business model Fontana had is what SMC is doing, also former management from Fontana is now a part of SMCE, see below

First we have the connection from the filings in place alongside a material contract with INgrooves already in place

As the issuer moves into Quarter 2 of 2015 management plans to expand its operations into ownership and control of certain digital content distribution outlets for both music and film. Management believes that as the entertainment industry trends towards more and more on-line distribution of content, the real revenue growth is in ownership of on-line content distribution “pipes.” If the future of the entertainment industry is in streaming content, I want our company to direct those streams rather than have to negotiate with companies to stream our content. The Company is currently negotiating the acquisition of a music distribution company

Prior to working with SMC, Mr. Heidolph managed business analysis and reporting for Fontana Distribution, Universal Music Group Distribution’s independent label division, from 2008-2011. During this time he automated nearly every reporting process and increased the division’s financial efficiency by 100%-150%. Additionally, he created forecasting models that could accurately predict physical and digital sales which had not been possible before.

www.billboard.com/biz/articles/news/retail/1098611/ingrooves-to-purchase-fontana
INgrooves, the digital aggregator launched in 2002, has purchased Fontana, the indie distribution company owned by Universal Music Group, the company announced today.

The deal gives the digital distributor a full array of services to offer to indie labels and at the same time provide capital to build up Fontana's capabilities in marketing music to brick-and-mortar merchants.
INgrooves itself already has a relationship with Universal Music Group, which bought 51% of the company in 2008, sources say. That stake was reduced to about 40% when Shamrock Capital, a unit of Shamrock Holdings, bought a majority interest in INgrooves in 2010. With the latest deal, Universal's stake in the company will be reduced to about 15%-20%.

In addition, sources say Shamrock is paying UMG about $5 million to $10 million for Fontana, which has annual sales of about $90 million and earnings before interest, taxes, depreciation and amortization of about $5 million to $7 million, Billboard.biz estimates.
INgrooves Makes Updates to Its Client Console

While Fontana's EBITDA would normally value that company at about $25 million -- based on the four-times multiple that distribution assets have traded for in the past -- total valuation for the deal is difficult to estimate because even though UMG's stake in INgrooves is being reduced, it now owns a portion of a larger company.

Billboard.biz estimates INgrooves' revenue at about $45 million, which means the company will now have revenues of about $135 million, making it the fourth-largest U.S. indie distributor behind RED, Alternative Distribution Alliance, and eOne Distribution.
Backbeat: Fontana Hosts Event for NYC Labels

Moreover, UMG benefits by being affiliated with an indie distributor that plans to grow with the backing of the deep-pocketed Shamrock Capital. A bigger, complementary INgrooves/Fontana operation with a revitalized game plan could benefit by the changing indie distribution landscape, with the Warner Music Group's ADA further integrated into WEA, and with the fate of Caroline/EMI Label Services Group up in the air due to its pending absorption into UMG.

While UMG is required to unload music assets in order to help finance its acquisition of EMI's recorded-music division, which is pending regulatory approval, sources say the deal for Fontana was in the works months before the major even came up for sale.

Universal Music Group Distribution provides some shared services with Fontana, and sources say some of those services will continue, while other backroom/office functions will be assumed by INgrooves. On the flip side, INgrooves plays a role in the digital pipeline for UMG, helping it to ready and deliver music to digital service providers.

"Through this acquisition, we are now able to offer the independent music community a fully integrated physical and digital distribution marketing solution in North America," INgrooves CEO and found Robb McDaniels said in a statement.

In the announcement, the company said the deal will allow for the expansion of the Label & Artist Services group. This unit, which currently provides product management, online marketing & PR coordination, sync licensing, brand partnership marketing, sponsorships and advertising for the respective companies, will be a core focus of expansion in the coming months. The company said the value-added services will be available to INgrooves Fontana clients on a per project basis.

McDaniels also said the deal will provide the company's "client base with a larger sales force, more marketing resources and a one-stop global retail network that maximizes opportunities in this dynamic, challenging environment."

As part of the deal, Fontana president Ron Spaulding, who plays a key A&R role in bringing labels to Fontana, will stay with the company as president and run it, sources say, while Dave Zierler, recently promoted to president of INgrooves, will run that side of the company, with both reporting to McDaniels.

Why would INgrooves want to buy SMCE? Well as you can see they bought Fontana and they are executing the same business model.

INgrooves Music Group is comprised of 3 service divisions: Distribution Services, Artist Services (“INresidence”), and Rights Services. All three divisions work in alignment to provide each of our partners with a solid customized solution that meets their business needs. Like our technology, we are always developing our comprehensive menu of music distribution, marketing and rights management services so that our label and artist partners will have the tools and resources they need to succeed today and tomorrow.