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FOR
IMMEDIATE RELEASE
JOINT
ANNOUNCEMENT BY ACS MEDIA INCOME FUND AND
CARIBE ACQUISITION HOLDINGS, LLC
CARIBE
ACQUISITION HOLDINGS TO ACQUIRE OPERATING
BUSINESS OF ACS MEDIA INCOME FUND FOR CDN$188 MILLION
NEW
YORK and TORONTO, September 25, 2006
– ACS Media Income Fund (the “Fund”) (TSX:
AYP.UN) and an affiliate of Caribe Acquisition Holdings, LLC
(“Caribe”) today announced that Caribe has entered
into a definitive agreement to acquire ACS Media LLC (“ACS
Media”), the Fund’s operating business.
Under
the agreement, Caribe will acquire the Fund’s wholly-owned
Canadian subsidiary, ACS Media Canada Inc., which holds a
99.9% interest in ACS Media, for CDN$188 million (US$168 million)
in cash. Caribe will also fund the repayment of approximately
US$35 million of ACS Media debt upon the closing of the transaction.
The proceeds of the sale equate to CDN$9.40 per unit of the
Fund, which are expected to be paid to the Fund’s unitholders
by way of redemption of the outstanding Fund units at a redemption
amount of CDN$9.40 per Fund unit. Subsequent to such redemption
of the outstanding Fund units, the Fund will be wound up.
ACS Media’s management is expected to remain with the
combined company following the consummation of the transaction.
The
transaction, which is subject to approval by the Fund’s
unitholders, regulatory approval and other closing conditions,
is expected to close in the fourth quarter of 2006. The Fund
has set October 16, 2006 as the record date for a special
meeting of unitholders to approve the terms of the transaction
and the wind up of the Fund. The special meeting of unitholders
is expected to be held by the end of November. The Fund’s
financial advisor, Genuity Capital Markets, has provided an
opinion to the Board of Trustees of the Fund that the consideration
to be received by the Fund’s unitholders under the transaction
is fair from a financial point of view to such unitholders.
Lehman Brothers Inc. and Wachovia Securities have acted as
co-advisors to Caribe in the transaction.
ACS
Media is the largest publisher of print and Internet advertising
directories in Alaska, producing 10 print directories and
distributing over 1 million copies of those directories to
business and residential consumers throughout Alaska. ACS
Media’s online directory, www.acsyellowpages.com, extends
the reach of advertisers’ content throughout Alaska and
across the world. Under a contract that runs through 2053,
ACS Media serves as the exclusive publisher of the “official”
print directories of Alaska Communications Systems Group,
Inc., the largest local exchange carrier in Alaska. For the
year ended December 31, 2005, ACS Media had revenues of US$37.6
million.
The
Fund’s sale of the business is the outcome of a review
by a Special Committee of the Board of alternatives for maximizing
unitholder value. The Fund’s business is located entirely
in Alaska and distributable cash is generated in US dollars;
however, distributions to its unitholders are paid in Canadian
dollars. Although the business has generated increases in
revenue and EBITDA since its IPO in May 2003, the weakening
of the U.S. dollar against the Canadian dollar impacted the
Fund’s ability to sustain its Canadian dollar distributions
at the rate established at the time of the IPO. Effective
with its July 2005 distribution, the Fund reduced monthly
distributions to bring them in line with the amount of U.S.
dollar distributable cash being generated by the Alaskan directory
business. Since then, the U.S. dollar has further weakened
and is now more than 20% lower than at the time of the IPO,
resulting in foreign exchange rates that could potentially
impair the Fund’s continuing ability to sustain its current
level of distributions.
Scott
Pomeroy, Caribe’s President, said: “This acquisition
is a major strategic step forward for our company, which already
controls the ‘incumbent’ directory publishers in
Puerto Rico and the Dominican Republic. ACS Media has a proven
track record of delivering solid financial and operating results,
which we intend to build on. The State of Alaska presents
significant growth opportunities for both our print and digital
platforms, and we look forward to solidifying ACS Media’s
leading position in the Alaskan local search market.”
Wes
Carson, President & CEO of ACS Media, said, “We believe
this transaction effectively surfaces the true value of the
business for unitholders. After a thorough review of the business
by the Special Committee, and careful consideration of alternatives
for creating unitholder value under the circumstances, the
Board of Trustees unanimously approved this transaction, concluding
that it is in the best interests of our unitholders.”
Carson added: “We are delighted to be joining with Scott
and his team, which is comprised of executives with an unparalleled
track record in the directory publishing industry. This transaction
will enable ACS Media to leverage a well-earned reputation
for market execution and allow us to continue enhancing our
existing range of print and online offerings while also developing
new products that meet our customers’ evolving needs.”
Conference
Call
ACS
Media Income Fund will discuss this announcement via conference
call on Monday, September 25, 2006 at 11:00 a.m. ET. The dial-in
number is 416-644-3423 for Toronto area callers and 1-800-814-4941
for other callers. To participate, please call 10 minutes
before the scheduled start of the conference call. The call
will also be webcast live at www.acsmedia.net or www.newswire.ca/webcast/.
A rebroadcast of the call will be available at 416-640-1917
or 1-877-289-8525, passcode 21204443#, until October 2, 2006.
About
Caribe Acquisition Holdings, LLC
Caribe
is the parent of Caribe Media, Inc. (“Caribe Media”),
a leading provider of print directories and Internet-based
local search services in the Caribbean. Caribe Media is the
majority owner of Axesa Servicios de Información, S.
en C., which publishes the “official” yellow and
white pages directories in Puerto Rico under the PRT brand.
Caribe Media also owns Caribe Servicios de Información
Dominicana, S.A., which publishes the “official”
yellow and white pages directories in the Dominican Republic
under the Paginas Amarillas brand.
Caribe
is a portfolio company of Welsh, Carson, Anderson & Stowe
(“WCAS”), which is one of the largest and most successful
private equity investment firms in the United States. Since
its founding in 1979, WCAS has organized 14 limited partnerships
with total capital over US$16 billion.
About
ACS Media Income Fund
ACS Media Income Fund is an open-ended, limited purpose trust
established under the laws of the Province of Ontario, which
indirectly holds a 99.9% interest in ACS Media. ACS Media
is the largest publisher of online products through its web
site www.acsyellowpages.com
and print advertising directories in Alaska that are distributed
to approximately 95% of the state’s population.
Further
information on ACS Media Income Fund can be found in its disclosure
documents filed with the securities regulatory authorities,
available at www.sedar.com.
This
release includes certain forward-looking statements including,
without limitation, statements concerning the Fund’s
future financial position, business strategy, projected costs
and plans and objectives of management for future operations.
Forward-looking statements generally can be identified by
the use of forward-looking terminology such as “may,”
“will,” “expect,” “intend,”
“estimate,” “anticipate,” “believe,”
“should,” “plans,” or “continue”
or the negative thereof or variations thereon or similar terminology.
Although the Fund believes that the expectations reflected
in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to be
correct. These forward-looking statements are subject to a
number of risks and uncertainties, and actual results could
differ materially from those anticipated in these forward-looking
statements.
#
# # #
For
further information:
ACS
Media Income Fund
Wayne Graham
Executive Vice President & CFO
Tel: 907.297.3015
Website: www.acsmedia.net
or
Caribe
Acquisition Holdings, LLC
John Fischer
Tel: 303-524-1418
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