Cricket Acquisition Group, Inc. to Acquire Cricket Media Group Ltd.

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

WASHINGTON, DC, Feb. 26, 2016 /CNW/ - Cricket Media Group Ltd. (TSX-V:CKT) ("Cricket Media" or the "Company") announced today that it has entered into an arrangement agreement (the "Arrangement Agreement") pursuant to which Cricket Acquisition Group, Inc., a newly incorporated entity created for the purpose of the transaction described herein (the "Purchaser") will acquire all of the outstanding voting common shares of Cricket Media, all of the outstanding restricted voting common shares of Cricket Media, and all of the outstanding Series A preferred shares of Cricket Media, in each case for Cdn$0.14 per share in cash. The acquisition of such shares will exclude those shares of Cricket Media which will be exchanged by certain shareholders of Cricket Media for shares in the capital of the Purchaser pursuant to roll-over and investment agreements (the "Rollover Agreements") to be executed by such shareholders with the Purchaser.

The purchase price represents a premium of approximately 56% to the closing price of Cricket Media's voting common shares on the TSX Venture Exchange on February 26, 2016 and represents a premium of approximately 55% to Cricket Media's volume weighted average share price for the twenty trading days ending on February 26, 2016.

The Purchaser is comprised of certain shareholders of Cricket Media, including ZG Ventures, LLC ("ZGV"), who currently own and/or control in aggregate approximately 7% of the outstanding voting common shares of Cricket Media, 64% of the outstanding restricted voting common shares of Cricket Media and 89% of the outstanding Series A preferred shares of Cricket Media. It is currently expected that prior to the mailing of the management information circular of Cricket Media pursuant to the Arrangement Agreement, which is currently expected to occur in early March of this year, the Purchaser will have entered into Rollover Agreements with shareholders of Cricket Media who own and/or control, directly or indirectly, in excess of two-thirds of the outstanding voting common shares of Cricket Media, two-thirds of the outstanding restricted common shares of Cricket Media and all of the outstanding Series A preferred shares of Cricket Media.

The transaction, which will be completed by way of a plan of arrangement (the "Arrangement"), is expected close early in the second quarter of 2016, subject to the satisfaction of certain closing conditions.

Pursuant to the Arrangement, the Purchaser will also acquire 5% secured convertible debentures of Cricket Media issued pursuant to a trust indenture dated January 21, 2016 (the "New Convertible Debentures"). The terms upon which the New Convertible Debentures will be acquired by the Purchaser will be described in a management information circular to be mailed to Cricket Media shareholders and holders of New Convertible Debentures in advance of the meeting to approve the Arrangement (the "Circular"), and will be set out in agreements (the "Debt Agreements") to be entered into by certain holders of New Convertible Debentures and the Purchaser prior to closing. 

The board of directors of Cricket Media, after consultation with its legal advisors, and on the unanimous recommendation of the Special Committee of the board of directors of Cricket Media, has determined to recommend that shareholders of Cricket Media vote in favour of the Arrangement.

Certain shareholders of Cricket Media (including all of the officers and directors of Cricket Media) who in the aggregate beneficially own approximately 67% of the outstanding voting common shares, restricted voting common shares and Series A preferred shares of Cricket Media (on a combined basis) have agreed pursuant to voting support agreements to vote their shares in favour of the Arrangement unless the Arrangement Agreement is terminated.

Completion of the transaction is subject to customary closing conditions, including court approval of the Arrangement, the approval of the Arrangement by Cricket Media shareholders voting as a single class (together with any majority of the minority voting approvals required under applicable Canadian securities laws), and the approval of the holders of New Convertible Debentures voting as a separate class. In addition to the customary closing conditions, the transaction is subject to the conditions that, (i) holders of not less than 66^2/3% of the voting common shares and restricted voting common shares (counted together as a single class) shall have entered into Rollover Agreements; (ii) holders of not less than 66^2/3% of the principal amount of New Convertible Debentures shall have entered into Debt Agreements prior to closing; and (iii) all holders of bridge indebtedness of the Company evidenced by secured convertible debentures due April 30, 2016 (currently in the aggregate principal amount of US$6,884,000)(the "Bridge Debentures") shall have entered into agreements to exchange such Bridge Debentures for securities of the Purchaser following closing.

Full details of the transaction will be included in the Circular. A copy of the Arrangement Agreement, the Circular, the voting support agreements and related documents will be filed with the Canadian securities regulatory authorities and will be available under Cricket Media's profiles at www.sedar.com. Information concerning the Purchaser in this news release has been provided by the Purchaser.

About Cricket Media Group Ltd.

Cricket Media Group Ltd. (TSXV:CKT) is an education media company that provides award-winning content on a safe and secure learning network for children, families and teachers across the world. Cricket Media's 11 popular media brands for toddlers to teens include Babybug, Ladybug, Cricket® and Cobblestone®. The Company's innovative web-based K12 tools for school and home include the ePals community and virtual classroom for global collaboration as well as In2Books®, a Common Core eMentoring program that builds reading, writing and critical thinking skills. Cricket Media serves approximately one million classrooms and millions of teachers, students and parents in over 200 countries and territories through its platform and NeuPals, its joint venture with China's leading IT services company Neusoft. Cricket Media also licenses its content and platform to top publishing and educational companies worldwide. For more information, please visit www.cricketmedia.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

This press release contains information that is forward-looking information within the meaning of applicable securities laws. In some cases, forward-looking information can be identified by the use of terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or the negative of these terms or other similar expressions concerning matters that are not historical facts and include statements regarding expectations regarding whether a transaction will be consummated, including whether conditions to the consummation of the transaction will be satisfied, or the timing for completing the transaction.

Forward-looking information by its nature necessarily involves risks and uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future events, performance or achievements expressed or implied by such forward-looking information. If any of these risks or uncertainties were to materialize or if the factors and assumptions underlying the forward-looking information were to provide incorrect, actual results could vary materially from those that are expressed or implied by such forward-looking information.    

Risks and uncertainties regarding Cricket Media are described in Cricket Media's Management's Discussion and Analysis for the year ended December 31, 2014 which is available on SEDAR at www.sedar.com.  Each of Cricket Media and the Purchaser disclaims any intention or obligation, other than those required by securities laws, to update or revise any forward-looking information.

SOURCE Cricket Media Inc.

Aric Holsinger, Chief Financial Officer, Cricket Media Group Ltd., Phone: [phone], [email protected]; Cory Pala, Investor Relations, E.vestor Communication Inc., Phone: [phone], [email protected]