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RLJ Acquisitions Says Image-Acorn Transaction to Close Oct. 3

1 Oct, 2012 By: Erik Gruenwedel

Fiscal transaction terms include $5 million less in cash

RLJ Acquisitions Oct. 1 said its $127.6 million purchase of Image Entertainment and Acorn Media to form RLJ Entertainment is expected to close Oct. 3.

Bethesda, Md.-based RLJ Acquisitions, which is owned by BET founder Robert Johnson, said terms of the transaction include a $5 million reduction in the cash purchase price in exchange for 575,000 shares of common stock and warrants to purchase 150,000 shares of RLJ Entertainment common stock.

Johnson agreed to surrender 150,000 shares of his RLJ SPAC Acquisition LLC common stock and warrants to purchase 300,000 shares of RLJ Entertainment common stock, effectively making the changes to the overall transaction the same as if one million less shares of the new distributor’s common stock had been redeemed.

RLJ SPAC Acquisition is also forfeiting 325,000 shares of common stock and warrants to purchase 550,000 shares of RLJ Entertainment common stock in order to offset the same number of shares of common stock and warrants RLJ Entertainment agreed to issue to an unrelated third party consultant.

To provide funding for content acquisitions and RLJ Entertainment’s ongoing working capital needs, it anticipates entering into a $70 million credit agreement with a financial group led by SunTrust Bank, which includes a five-year $15 million revolving credit facility and three tranches of term loans totaling $55 million.

RLJ Entertainment, which is headed by Image CEO Ted Green, expects its common stock to commence trading on the NASDAQ capital market the day after the closing date, and the warrants of RLJ Entertainment will begin trading on the over-the-counter bulletin board under the symbol RLJEW shortly thereafter.

Image shares were threatened with delisting by NASDAQ in February 2010 shortly before an investor group acquired the company and put Green in charge of operations.

Image reported a narrowed loss of $495,000 during its most recent fiscal period.

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