Hurray! News
Hurray! to Acquire Major Interest
in the Music Business of the Freeland Group,
a Pioneer in Internet Music Production and Distribution
BEIJING, Nov.14, 2005 /Xinhua-PRNewswire/ -- Hurray! Holding Co.,
Ltd. (Nasdaq: HRAY - News), a leading provider of advanced wireless
value-added services and mobile telecommunication network software
in the People’s Republic of China, today announced the signing of
definitive agreements to acquire a major interest in the music business
("Freeland Music") of the Freeland group, which is a group
of affiliated companies in China that is engaged in the production
and distribution of audio and video media products. Freeland Music
specializes in music production and distribution for its portfolio
of artists which includes some of the most popular singers in China,
such as Xiangxiang, Yang Chengang and Yang Yi. Many songs produced
by Freeland Music and its artists, such as "Zhu Zhi Ge (Song
of Pigs) ", "Lao Shu Ai Da Mi (Mice Love Rice) ",
"Mei Er Ai Wo (Girl Love Me) ", and "Hui Lai Wo De
Ai (Come Back My Love) ", are not only top hits in ringtones,
ring-back tones and digital downloads on mobile phones and the Internet
in China, but also appeared in Top 20 World list of Apple Computer’s
iTunes services for the month of October 2005.
In the acquisition, Freeland group will inject the music business
into a newly formed company ("Hurray! Freeland"), which
upon the closing of the acquisition will be 60% owned by Hurray!
and 40% owned by Freeland group. The total consideration for the
acquisition is US$7,560,000 in cash. Consideration payable by Hurray!
and the respective ownership interests of the parties in Hurray!
Freeland are subject to adjustment based on the financial performance
of Hurray! Freeland following the closing of the acquisition. The
transaction is expected to be accretive to Hurray!’s earnings per
share in 2006.
Hurray! currently expects the transaction to close before December
31, 2005, subject to required China regulatory approval and other
customary closing conditions. Upon closing, pursuant to certain
contractual arrangements, Hurray! will distribute Hurray! Freeland's
music via wireless and Internet platforms, and Freeland group will
distribute such music via offline channels, such as music stores.
Commenting on this acquisition, QD Wang, Chairman and Chief Executive
Officer of Hurray!, said, "We are very pleased to announce
this strategic partnership with Freeland group, a pioneer and leader
in Internet as well as traditional music production and distribution
in China. This will give us significant depth and breadth in music
content and music production capabilities. It is a defining step
for Hurray! in transforming into a leading digital music production
and distribution house in China."
"This event marks the first time in China that a leading music
production house joins hands with a leading digital music distribution
company. Together, we will strive to redefine the music industry
in China. We are thrilled to partner Hurray! in this endeavor, "
added Xiongbing Zhong, Chairman and Chief Executive Officer of Freeland
group companies and to-be-established Hurray! Freeland.
China eCapital served as financial advisor to Hurray! in the transaction.
About Hurray! Holding Co., Ltd.
Hurray! provides wireless value-added services such as ringtones,
picture downloads, community and entertainment services to mobile
users in China. The company is one of the market leaders in providing
these services using wireless application protocol, commonly referred
to as WAP, in China. WAP services are offered through the advanced
2.5G mobile networks, the most advanced broadly available mobile
networks deployed in China. Hurray! also offers these services through
2G mobile networks.
In addition, Hurray! designs, develops, sells and supports a service
provisioning and management software that is used by China Unicom,
one of the two principal mobile operators in China, to support its
2.5G services platform.
About Freeland Group
Freeland group engages in the production and distribution of audio
and video media products in China. It is a pioneer in China in creating
and promoting pop stars by distributing their music on the Internet
in addition to through traditional channels. Many songs produced
and promoted by Freeland for its artists such as Xiangxiang, Yang
Chengang and Yang Yi are among the top hits in the markets of ringtones,
ring-back tones and digital downloads on mobile phones and the Internet
in China.
Forward-looking Statements
This press release contains statements of a forward-looking nature.
These statements are made under the "safe harbor" provisions
of the U.S. Private Securities Litigation Reform Act of 1995. You
can identify these forward-looking statements by terminology such
as "will," "expects," "anticipates,"
"future," "intends," "plans," "believes,"
"estimates" and similar statements. The accuracy of these
statements may be impacted by a number of business risks and uncertainties
that could cause actual results to differ materially from those
projected or anticipated, including: the risk that this or any future
acquisition will not create the operational and financial results
that Hurray!'s management and board of directors expects, including
in particular the possibility that this acquisition may not be accretive
to earnings in any future period or that Hurray! Freeland may not
become a leading digital music production and distribution house
in China; the risk that Hurray! will not be able to effectively
manage Hurray! Freeland's artists or effectively utilize its library
of music; the risk that this and any future acquisition could divert
management's attention from Hurray!'s operations, which could adversely
affect its results of operations; and the risks outlined in our
filings with the Securities and Exchange Commission, including our
registration statement on Form F-1. We do not undertake any obligation
to update this forward-looking information, except as required under
applicable law.
For more information, please contact:
Phoebe Meng
Investor Relations Manager
Tel: 8610-6518-8989 ext 6806
yfmeng@hurray.com.cn
SOURCE: Hurray! Holding Co., Ltd.
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