EX-99.1
4
a05-2391_1ex99d1.htm
EX-99.1
Exhibit 99.1
Traffix
Acquires Hot Rocket Marketing Inc.; Pioneering Internet Media Trading Firm to
Significantly Expand Traffix's Marketing Reach
Thursday January 27, 8:00
AM EST
PEARL
RIVER, N.Y., Jan 27, 2005 (BUSINESS WIRE) - Traffix, Inc. (TRFX), a leading
on-line marketing company, today announced that it has acquired Hot Rocket
Marketing Inc., a privately held on-line media and marketing agency based in
New York.
Founded
four years ago by current President and CEO, Mark Colacioppo, Hot Rocket purchases
Internet advertising media from numerous sites and networks, and provides its
clients with this vast inventory of Internet advertising media on a per
impression and performance basis. Hot Rocket currently purchases hundreds of
millions of advertising impressions reaching over 25 million users world-wide,
on a monthly basis.
Commenting
on Hot Rocket's business, Mr. Jeffrey Schwartz, CEO of Traffix, stated, "Mark
and his team at Hot Rocket are part of a new breed of Internet media pioneers
who are uniquely adept at arbitraging all forms of the billions and billions of
advertising impressions available on the Internet in the US and abroad. After
working closely with Hot Rocket on a number of initiatives during the past
year, we believe they are a perfect compliment to our existing business. Their
unique blend of speed to market, Internet savvy, and direct marketing
discipline, together with Traffix's broad reach and infrastructure should
enable us to accelerate our core growth and capitalize on a variety of
opportunities across the rapidly evolving Internet media landscape".
Commenting
on the acquisition, Mr. Schwartz added, "Since our acquisition of the search
engine marketing firm SendTraffic last July, we began focusing on an
acquisition of another Internet media company that would compliment our core
competency of maximizing the value of website traffic, and also enhance our
ability to attract cost-effective website traffic. Hot Rocket is already test
marketing in its media a modified version of our ad-serving optimization
technology in order to generate more traffic to Traffix's websites and for its
clients. We believe that the extended media reach, expanded sales force and
enhanced client base resulting from this acquisition gives Traffix the synergies
we were seeking and the added benefit of Mark Colacioppo's operational
experience, successful track record and unique entrepreneurial spirit." Mr.
Schwartz added, "In many ways, Hot Rocket's business is similar to
Advertising.com, a company that was recently acquired by AOL-Time Warner".
Traffix
reported that it expects Hot Rocket to generate approximately $6 million in
revenue and $1 million of EBITDA (1) in the twelve month period following the
closing. Traffix also reported that after the closing, it will still have cash
and marketable securities on its balance sheet of over $30 million.
Under
the terms of the acquisition agreement, Traffix paid $3.532 million at the
closing for Hot Rocket's assets (other than cash and receivables), $2.832
million of which was paid in cash and the balance in shares of Traffix common
stock. In addition, Traffix agreed to pay Hot Rocket up to an
additional
$12.5 million in contingent purchase price if Hot Rocket generates an aggregate
of $27 million in EBITDA over the four year period following the closing. The
contingent purchase price is payable in semi-annual and annual installments
pursuant to a formula based on meeting certain graduating EBITDA targets.
Traffix may pay, at its option, up to 50% of the contingent purchase price, if
any is earned, in stock (subject to certain conditions and limitations), with
the share price determined on or about the time of its issuance. In connection
with the acquisition by Traffix, the founder of Hot Rocket, Mark Colacioppo,
entered into a five-year employment contract.
Hot
Rocket's President and CEO, Mr. Mark Colacioppo, commented, "This is a
tremendous opportunity for us to take Hot Rocket to a new level. By leveraging
the technological and marketing horsepower of Traffix, we expect to grow our
business much more rapidly than on our own. Some of the new business areas that
we anticipate for Hot Rocket in 2005 are based on programs recently developed
with Traffix. We anticipate major growth opportunities in the on-line advertising
industry, and believe that Hot Rocket will capitalize on these situations as we
have in the past." Mr. Colacioppo continued, "We looked at a number of
opportunities for Hot Rocket and felt this was the best fit for many reasons. I
see tremendous untapped value in what Traffix has created, and I believe we can
help them realize the true value of their assets. I am excited about working
with this seasoned and disciplined management team".
The
President and CEO of Hot Rocket Marketing, Mr. Mark Colacioppo, began his
Internet marketing career in 1996 when he launched the merchandise side of the
PCH.com (Publishers Clearing House) website. While at Publishers Clearing
House, he worked extensively with former PCH executive, Ken Auerfeld, who is
now Traffix's Chief Marketing Officer. In 1999, Mr. Colacioppo co-founded
Network60, Inc. where he developed several highly visited and profitable
websites including OneStopWinning.com which was subsequently acquired by
About.com. In 2000, after Network 60 was acquired, Mark started Hot Rocket
Marketing.
Traffix
also noted that it expects to announce its fiscal fourth quarter and 2005 year
end results the week of February 14th.
About
Traffix, Inc:
Traffix
is a leading Internet media and marketing company that owns and operates a vast
network of entertaining web destinations that provide compelling content to
millions of consumers. Traffix serves highly targeted advertisements throughout
its network via its proprietary ad-serving optimization technology, yielding measurable
results for its clients. Traffix is a member of the ESPC division of the NAI,
an organization committed to providing consumers with clear explanations of
Internet advertising practices. For more information about Traffix, Inc., visit
the website @ www.traffixinc.com.
About
Hot Rocket Marketing Inc:
Hot
Rocket is a full-service online marketing agency, helping advertisers,
publishers, brokers and agencies achieve their goals. Its services include
buying and selling all forms of online media in the US and internationally,
search engine marketing, consulting, creative development, email list
management as well as ad serving and reporting, and has a particular expertise
in managing targeted contextual advertising. For more information about Hot
Rocket Marketing, Inc. visit the website @ www.hotrocketinc.com.
This
release contains certain forward-looking statements and information relating to
Traffix that are
based
on the beliefs of Traffix's management, as well as assumptions made by and
information currently available to the Company. Such statements reflect the
current views of the Company with respect to future events including estimates
and projections about Traffix's business based on certain assumptions of
Traffix's management, including those described in this Release. These
statements are not guarantees of future performance and involve risk and
uncertainties that are difficult to predict, including changes in demand for
the Company's services and products, changes in technology and the regulatory
environment affecting the Company's business, and difficulties encountered in
the integration of acquired businesses. Should one or more of these underlying
assumptions prove incorrect, actual results may vary materially from those
described herein as anticipated, believed, estimated or expected. The Company
does not intend to update these forward-looking statements.
You
may register to receive Traffix's future press releases or to download a
complete Digital Investor Kit(TM) including press releases, regulatory filings
and corporate materials by clicking on the "Digital Investor Kit(TM)" icon at
www.kcsa.com.
(1)
"EBITDA" means earnings before interest, income taxes, depreciation and
amortization.
SOURCE:
Traffix, Inc.
CONTACT:
Traffix, Inc.
Joshua B. Gillon, 845-620-1212 ext. 205
joshg@traffixinc.com
or
KCSA
Todd Fromer/ Erika Levy, 212-682-6300 ext. 215/208
tfromer@kcsa.com/elevy@kcsa.com
http://www.kcsa.com

EX - 99 . 1 4 a05 - 2391 _ 1ex99d1 . htm EX - 99 . 1 Exhibit 99 . 1 Traffix Acquires Hot Rocket Marketing Inc . ; Pioneering Internet Media Trading Firm to Significantly Expand Traffix 's Marketing Reach Thursday January 27 , 8 : 00 AM EST PEARL RIVER , N . Y . , Jan 27 , 2005 ( BUSINESS WIRE ) - Traffix , Inc . ( TRFX ) , a leading on - line marketing company , today announced that it has acquired Hot Rocket Marketing Inc . , a privately held on - line media and marketing agency based in New York . Founded four years ago by current President and CEO , Mark Colacioppo , Hot Rocket purchases Internet advertising media from numerous sites and networks , and provides its clients with this vast inventory of Internet advertising media on a per impression and performance basis . Hot Rocket currently purchases hundreds of millions of advertising impressions reaching over 25 million users world - wide , on a monthly basis . Commenting on Hot Rocket 's business , Mr . Jeffrey Schwartz , CEO of Traffix , stated , " Mark and his team at Hot Rocket are part of a new breed of Internet media pioneers who are uniquely adept at arbitraging all forms of the billions and billions of advertising impressions available on the Internet in the US and abroad . After working closely with Hot Rocket on a number of initiatives during the past year , we believe they are a perfect compliment to our existing business . Their unique blend of speed to market , Internet savvy , and direct marketing discipline , together with Traffix 's broad reach and infrastructure should enable us to accelerate our core growth and capitalize on a variety of opportunities across the rapidly evolving Internet media landscape " . Commenting on the acquisition , Mr . Schwartz added , " Since our acquisition of the search engine marketing firm SendTraffic last July , we began focusing on an acquisition of another Internet media company that would compliment our core competency of maximizing the value of website traffic , and also enhance our ability to attract cost - effective website traffic . Hot Rocket is already test marketing in its media a modified version of our ad - serving optimization technology in order to generate more traffic to Traffix 's websites and for its clients . We believe that the extended media reach , expanded sales force and enhanced client base resulting from this acquisition gives Traffix the synergies we were seeking and the added benefit of Mark Colacioppo 's operational experience , successful track record and unique entrepreneurial spirit . " Mr . Schwartz added , " In many ways , Hot Rocket 's business is similar to Advertising.com , a company that was recently acquired by AOL - Time Warner " . Traffix reported that it expects Hot Rocket to generate approximately $ 6 million in revenue and $ 1 million of EBITDA ( 1 ) in the twelve month period following the closing . Traffix also reported that after the closing , it will still have cash and marketable securities on its balance sheet of over $ 30 million . Under the terms of the acquisition agreement , Traffix paid $ 3.532 million at the closing for Hot Rocket 's assets ( other than cash and receivables ) , $ 2.832 million of which was paid in cash and the balance in shares of Traffix common stock . In addition , Traffix agreed to pay Hot Rocket up to an additional $ 12.5 million in contingent purchase price if Hot Rocket generates an aggregate of $ 27 million in EBITDA over the four year period following the closing . The contingent purchase price is payable in semi - annual and annual installments pursuant to a formula based on meeting certain graduating EBITDA targets . Traffix may pay , at its option , up to 50 % of the contingent purchase price , if any is earned , in stock ( subject to certain conditions and limitations ) , with the share price determined on or about the time of its issuance . In connection with the acquisition by Traffix , the founder of Hot Rocket , Mark Colacioppo , entered into a five - year employment contract . Hot Rocket 's President and CEO , Mr . Mark Colacioppo , commented , " This is a tremendous opportunity for us to take Hot Rocket to a new level . By leveraging the technological and marketing horsepower of Traffix , we expect to grow our business much more rapidly than on our own . Some of the new business areas that we anticipate for Hot Rocket in 2005 are based on programs recently developed with Traffix . We anticipate major growth opportunities in the on - line advertising industry , and believe that Hot Rocket will capitalize on these situations as we have in the past . " Mr . Colacioppo continued , " We looked at a number of opportunities for Hot Rocket and felt this was the best fit for many reasons . I see tremendous untapped value in what Traffix has created , and I believe we can help them realize the true value of their assets . I am excited about working with this seasoned and disciplined management team " . The President and CEO of Hot Rocket Marketing , Mr . Mark Colacioppo , began his Internet marketing career in 1996 when he launched the merchandise side of the PCH.com ( Publishers Clearing House ) website . While at Publishers Clearing House , he worked extensively with former PCH executive , Ken Auerfeld , who is now Traffix 's Chief Marketing Officer . In 1999 , Mr . Colacioppo co - founded Network60 , Inc . where he developed several highly visited and profitable websites including OneStopWinning.com which was subsequently acquired by About.com . In 2000 , after Network 60 was acquired , Mark started Hot Rocket Marketing . Traffix also noted that it expects to announce its fiscal fourth quarter and 2005 year end results the week of February 14 th . About Traffix , Inc : Traffix is a leading Internet media and marketing company that owns and operates a vast network of entertaining web destinations that provide compelling content to millions of consumers . Traffix serves highly targeted advertisements throughout its network via its proprietary ad - serving optimization technology , yielding measurable results for its clients . Traffix is a member of the ESPC division of the NAI , an organization committed to providing consumers with clear explanations of Internet advertising practices . For more information about Traffix , Inc . , visit the website @ www.traffixinc.com . About Hot Rocket Marketing Inc : Hot Rocket is a full - service online marketing agency , helping advertisers , publishers , brokers and agencies achieve their goals . Its services include buying and selling all forms of online media in the US and internationally , search engine marketing , consulting , creative development , email list management as well as ad serving and reporting , and has a particular expertise in managing targeted contextual advertising . For more information about Hot Rocket Marketing , Inc . visit the website @ www.hotrocketinc.com . This release contains certain forward - looking statements and information relating to Traffix that are based on the beliefs of Traffix 's management , as well as assumptions made by and information currently available to the Company . Such statements reflect the current views of the Company with respect to future events including estimates and projections about Traffix 's business based on certain assumptions of Traffix 's management , including those described in this Release . These statements are not guarantees of future performance and involve risk and uncertainties that are difficult to predict , including changes in demand for the Company 's services and products , changes in technology and the regulatory environment affecting the Company 's business , and difficulties encountered in the integration of acquired businesses . Should one or more of these underlying assumptions prove incorrect , actual results may vary materially from those described herein as anticipated , believed , estimated or expected . The Company does not intend to update these forward - looking statements . You may register to receive Traffix 's future press releases or to download a complete Digital Investor Kit ( TM ) including press releases , regulatory filings and corporate materials by clicking on the " Digital Investor Kit ( TM ) " icon at www.kcsa.com . ( 1 ) " EBITDA " means earnings before interest , income taxes , depreciation and amortization . SOURCE : Traffix , Inc . CONTACT : Traffix , Inc . Joshua B . Gillon , 845 - 620 - 1212 ext . 205 joshg@traffixinc.com or KCSA Todd Fromer / Erika Levy , 212 - 682 - 6300 ext . 215 / 208 tfromer@kcsa.com / elevy@kcsa.com http://www.kcsa.com