MemberWorks Incorporated, a leading provider of consumer and membership services through affinity marketing and online channels, today announced it has entered into an agreement to acquire Lavalife Inc. (“Lavalife”), a leading provider of online and IVR-based interactive personals services. MemberWorks will acquire Lavalife for approximately CAD $152.5 million in cash. Lavalife senior management will purchase approximately CAD $11.9 million in MemberWorks restricted common stock at closing.
Lavalife, headquartered in Toronto, Canada, serves over 700,000 active customers principally in the U.S., Canada, and Australia. Lavalife’s services have been built on the unique concept of enabling people to interact with each other in a real-time, “Anywhere”, “Anytime”, and “Anyhow” environment and allows singles to spontaneously communicate and search for a date, meet new people, and more actively manage their social lives. Lavalife’s global revenues ranked 2nd in 2003 for interactive personals services. Lavalife.com, the company’s interactive web site, had 8.2 million unique visitors in January 2004, ranking 5th globally and 1st in Canada, according to comScore Media Metrix. Revenues were CAD $102.6 million and EBITDA was CAD $17.4 million for the fiscal year ended September 30, 2003.
MemberWorks expects the transaction, which is subject to customary closing conditions, to be completed in April 2004. The acquisition is expected to be neutral or accretive to Fiscal 2005 earnings and accretive to Fiscal 2006 earnings. Lavalife expects revenues of CAD $120 million and EBITDA of CAD $19 million for Fiscal 2005.
Gary Johnson, President and CEO of MemberWorks, said, “With the acquisition of Lavalife, we will be able to broaden the scope of our online marketing presence and gain entry into the large and rapidly growing personals channel. Lavalife provides several key elements in extending our business online: a proven business model, expanded demographics, unique and expanding services, key strategic partnerships, and a solid track record. This acquisition is an excellent strategic fit and we believe that the combination will create new opportunities for continued growth.”
Bruce Croxon, CEO of Lavalife, said, “This combination will allow us to accelerate our top line growth, leverage our business model and leading brand with MemberWorks capital, management expertise, and synergies. We are enthusiastic about the opportunities it will provide for our employees, partners, and customers.”
MemberWorks also announced today it has extended the term of its bank credit facility to March 31, 2005 and increased the borrowing amount to $40 million from $28 million.
Conference Call Note:
MemberWorks will host a conference call on Thursday, March 4, 2004, at 10:00 A.M., EST, to discuss the announcement. This conference call will also be available live on the investor relations page of Company’s web site at www.memberworks.com. Please go to the web site at least fifteen minutes prior to the call to register and download any necessary audio software. To listen to the conference call, please dial (888) 566-7602 approximately five to ten minutes before the scheduled start time. When prompted, state passcode “MBRS.”
For those who cannot listen to the live call, an audio replay of the call will be available approximately one hour after completion of the call until midnight on March 19, 2004. To listen to the audio replay, please call (800) 468-0318. A replay of the web cast will also be available on the Company’s website beginning approximately 2 hours after the end of the call and will remain available until March 19, 2004.