PlanetOut Inc. Acquires LPI Media Inc., Publisher of The Advocate and OUT
November 09 2005 - 4:29PM
PR Newswire (US)
Creates the World's Largest Gay Media Company, Leading Online and
Offline Brands Now Under One Roof SAN FRANCISCO, Nov. 9
/PRNewswire-FirstCall/ -- PlanetOut Inc. (NASDAQ:LGBT) today
announced that it has acquired substantially all of the assets of
LPI Media Inc., and affiliated direct marketing and publishing
entities for $24.0 million in cash and approximately $7.1 million
in seller- financed debt. PlanetOut will also reimburse certain
prepaid and other expenses totaling approximately $1.0 million.
LPI, a privately-held company, is the nation's leading publisher
targeting the gay and lesbian market, distributing more than eight
million copies of its magazines each year. LPI publishes The
Advocate and OUT, which are the two largest circulation LGBT
magazines in the U.S., as well as the acclaimed Web sites
Advocate.com, OUT.com and related e-commerce sites. PlanetOut
intends to finance the cash portion of the purchase price with cash
on hand. PlanetOut expects this acquisition to be accretive, with
LPI 2005 annual revenues for its consolidated entities currently
estimated to be approximately $29.0 million. "This transaction will
further advance our strategy of building a far-reaching media and
entertainment company which aggregates the largest gay and lesbian
media brands," said Lowell Selvin, chairman and chief executive
officer, PlanetOut Inc. "This combination provides a larger, more
diverse foundation for additional growth, particularly in our
advertising business, as it becomes a larger percentage of our
overall revenue, and it enables us to better reach the markets we
serve, driving higher growth in a more cost- effective manner.
Besides, this is one gay marriage the laws do allow!" STRATEGIC AND
FINANCIAL BENEFITS OF THE TRANSACTION -- Combines OUT and The
Advocate, the two largest circulation LGBT magazines in the U.S.,
offering attractive cost per thousand impressions (CPMs), ad page
growth and renewal rates, with the global online reach of
PlanetOut. -- Provides PlanetOut with a more balanced revenue mix
among advertising, subscription and transaction services. On a pro
forma basis, for the first nine months of 2005, the combined entity
would have had approximately 41 percent of its overall revenue from
advertising, 45 percent from subscriptions and 14 percent from
transaction services. -- Brings together a complementary advertiser
base with mutual strength in the entertainment and travel
categories. LPI's solid accounts list of fashion, retail and
consumer packaged goods advertisers augment PlanetOut's growing
base of pharmaceutical and automotive accounts. -- Nearly doubles
PlanetOut's estimated 2005 pro forma revenue and is expected to be
accretive. -- Expected to provide both revenue synergies and
expense savings in numerous areas by engaging PlanetOut's model of
high incremental growth and efficient customer acquisition. "We
believe that the marriage of PlanetOut and LPI will enable us to
immediately extend our market reach and broaden our advertiser
base," said PlanetOut Inc. President Mark Elderkin. "As a combined
entity, we expect to use PlanetOut's proven ability to drive
circulation growth as we deploy our complementary marketing and
editorial assets to create cross-platform programs that engage our
audience, while providing unique sponsorship opportunities for our
advertising partners." Conference Call and Webcast Information As
previously announced, PlanetOut Inc. plans to report its financial
results for the third quarter ended September 30, 2005 after the
close of market today, November 9, at 4:30 p.m. ET/1:30 p.m. PT.
The company's management will discuss these results and the
acquisition of LPI Media in a teleconference and live webcast for
all investors at 5:30 p.m. ET/2:30 p.m. PT. Investors in the United
States and Canada can dial 800-218-9073, access code 11042129, to
listen to the teleconference. International callers can access the
call at 303-262-2140. A telephonic replay will also be available
for two weeks after the live call at 800-405-2236 (international
callers dial 303-590-3000), access code 11042129. About LPI Media
Inc. LPI is the nation's leading content producer targeting the gay
and lesbian community, distributing more than 8.2 million copies of
its magazines each year. Its titles and Web sites include The
Advocate (http://www.advocate.com/), the community's leading
national news source since 1967; OUT (http://www.out.com/), the
popular lifestyle magazine that celebrates the spirit of gay
culture, including fashion and style, trends, society, and the
arts; and HIVPlus (http://www.hivplusmag.com/), among other titles
and online platforms. LPI Media is headquartered in Los Angeles,
with additional offices in New York. About PlanetOut Inc. PlanetOut
Inc. is a leading global media and entertainment company serving
the lesbian, gay, bisexual and transgender (LGBT) community.
PlanetOut's media properties include Gay.com, PlanetOut.com,
Kleptomaniac.com, and OUT&ABOUT Travel, in addition to the
newly-acquired national magazines and acclaimed Web sites of LPI
and related entities. These properties include The Advocate
(http://www.advocate.com/); OUT (http://www.out.com/); HIVPlus
(http://www.hivplusmag.com/), as well as other publishing, direct
marketing and e-commerce properties, including Alyson Publications,
SpecPub, Inc. and Triangle Marketing Services, Inc. PlanetOut,
based in San Francisco, offers FORTUNE 1000 advertisers access to
what it believes to be the most extensive network of gay and
lesbian people in the world. For more information, please visit
http://www.planetoutinc.com/. Forward-Looking Statements In
addition to the historical information contained herein, this press
release contains forward-looking statements, including statements
regarding the potential synergies, accretive nature and financial
impact of PlanetOut's recent acquisition of LPI and its related
entities, as well as statements containing the words "believes,"
"anticipates," "expects," and similar words. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of the company to differ materially from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the
company's limited operating history and variability of operating
results; the company's ability to attract and retain subscribers
and advertisers; the company's ability to integrate the acquired
assets of LPI and its related entities; competition; timing of
product launches; and the company's dependence on technology
infrastructure and the Internet. Additional information concerning
factors that could affect PlanetOut's future business and financial
results is included in the company's Annual Report on Form 10-K for
the year ended December 31, 2004 and other public filings filed
from time to time with the Securities and Exchange Commission
(SEC), which are available at the SEC's website at
http://www.sec.gov/. All figures reported today are unaudited and
may be subject to change. DATASOURCE: PlanetOut Inc. CONTACT: Media
Relations, Spencer Moore of PlanetOut Inc., +1-415-834-6476, or ;
or Investor Relations, Peter Denardo of Demer IR, +1-415-834-6340,
or Web site: http://www.planetoutinc.com/
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