Think Partnership (formerly CGI Holding Corporation) will sell it’s online dating and education holdings to Mountains West Exploration. Sale includes $21M in cash an $9m in common stock.
Think purchased Vintacom Media Group in April 2005 along with the Real Estate School for $4.95 million in cash and $4.95 million in stock to acquire the two companies. Think went on to announce the price of Real Estate School as $4.4 million, which means Vintacom was purchased for approximately $5.5 million.
Think funded the cash portion of the purchase price of Vintacom using funds borrowed from Wachovia Bank, which has increased its line of credit for the Company from $5 million to $7.5 million, in anticipation of a $15 million facility. I’m not certain if this actually went through.
Think Partnership CEO Gerard M. Jacobs:
We are under no pressure to divest ourselves of these businesses as they are profitable. However, after due consideration, we believe that this transaction, if completed, would clarify our business model, and better focus our management time and capital on integration and growth opportunities for our online marketing and advertising business segment while allowing a significant pure play opportunity for these important but now, non-core assets.
I have said before, Think is like a smaller version of IAC but it’s holdings have been all over the map. One thing they appear to be doing right is getting out of the dating industry while the getting is still good. I’m sure they realized that focusing on their existing stable of online marketing and advertising operations will reap greater profits.
With a caveat that I am not a finance guy, at first glance, the deal appears tenuous at best.
MWXI is a publicly traded shell corporation which does not currently have the capital needed to complete this transaction.
Think has done no due diligence on Mountains West, yet MWXI currently is controlled by individuals who are shareholders of THK and who are actively involved in certain other business transactions and companies with members of THK’s management and Board of Directors.
Also announced this week, Think will sell $26.5 million of series A convertible preferred shares to fund its purchase of Litmus Media Inc. The company expects net proceeds of about $24.8 million from a private placement to institutional investors. News.
Litmus has built click fraud protected advertising distribution technologies for the performance-based advertising, search marketing, and e-retailing industries, provides merchants with a unique patent-pending order abandonment recovery technology called Second Bite, and operates a profitable portfolio of web properties including online yellow page services, leading local city directories, a meta-shopping search engine, product/coupon search sites, and an affinity-based web search engine.
Think also filed an 8-K on 3-22-06 stating:
…Think amended its agreement to acquire Litmus Media, Inc. to extend the outside closing date of the acquisition to April 5, 2006, to increase the stock portion of the merger consideration by 79,268 shares of common stock of the Company to a total of 3,250,000 shares, and to allow the pre-closing dividend to be received by the Litmus shareholders out of Litmus’ cash on hand to be increased by $150,000.
Think announced that its letter of intent to acquire Crystal Reference Systems Limited (“Crystal Reference”) has been terminated, after the Company and Crystal Reference failed to agree upon mutually acceptable definitive agreements.
Think Partnership Inc.’s revenues totalled $30.6M for the nine months ending 9-30-05, up from $11.5M. Net income totaled $1.14M, vs. a loss of $770K.
Think is trading down a penny at $2.00.
Mountains West is up 55% to 70 cents.
Yahoo Press Release.
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