NEW YORK--(BUSINESS WIRE)--March 28, 2006--Alloy, Inc. (Nasdaq:
ALOY), under the banner of Alloy Media + Marketing (AM+M), a pioneer
in nontraditional media and marketing, today announced it has acquired
Sconex, Inc. (www.sconex.com), one of the fastest growing online
social networking communities connecting high school students.
Sconex is a vibrant social networking site focused on providing a
platform for teens to interact with peers via their high school
profiles. Sconex also provides a platform for youth advertisers to
connect and communicate with young adults in a meaningful,
contextually appropriate way.
Pursuant to the transaction, Alloy acquired all the issued and
outstanding stock of Sconex in exchange for $6.1 million, plus an
additional potential earnout payment and expenses. Comprising the $6.1
million is 273,551 shares of Alloy common stock issuable upon closing,
which shares are valued at $12.7945 per share, representing a 20 day
average closing price of a share of Alloy common stock as quoted on
the NASDAQ National Market, and a minimum earnout payment in the
amount of approximately $2.6 million. In addition, depending upon
Sconex's financial performance during the 12-month period commencing
on April 1, 2006, the former Sconex stockholders might be entitled to
an increased earnout payment. A certain portion of any earnout payment
payable to each Sconex stockholder will be contingent upon continued
employment by such stockholder for an extended period following the
closing date. The shares issued in connection with the acquisition
will initially be unregistered but will have accompanying registration
rights. The earnout payment is payable at Alloy's option in shares of
Alloy common stock, cash or a combination of both, subject to certain
limitations on the amount of cash that may be paid.
The acquisition represents Alloy's ongoing commitment to
optimization of its established network of youth-focused online
properties including alloy.com, delias.com, ccs.com, collegeclub.com
and careersandcolleges.com, collectively spanning the entire youth
market.
"We are excited to add this asset to our cross platform network of
media. Sconex, with its core emphasis on content for teens by teens,
represents a terrific solution for advertisers endeavoring to reach
young people in a secure online environment through social network
marketing," said Matt Diamond, Chairman and CEO of Alloy Media +
Marketing. Adding, "We were particularly impressed with its ability to
attract trendsetters."
With a 3-fold increase in visitors over the past six months and
with the average visitor spending 59.8 minutes per day on the site as
measured by Media Metrix in February, Sconex has proven its ability to
capture and propagate high school communities via organic word of
mouth. The acquisition by Alloy will enable Sconex to extend
seamlessly through high schools across the country.
"We are thrilled to have the youth marketing muscle of Alloy
behind us, offering immediate integration into 60% of the nation's
high schools through the Alloy media properties," said Josh Schanker,
Sconex founder and CEO.
About Alloy
Alloy, Inc., under the banner of Alloy Media + Marketing (AM+M),
is a widely recognized pioneer in nontraditional marketing. Working
with AM+M, marketers reach consumers through a host of programs
incorporating Alloy's diverse array of media and marketing assets and
expertise in direct mail, college and high school media, interactive,
display media, college guides, promotional and social network
marketing. For further information regarding Alloy, please visit our
corporate website at (www.alloymarketing.com).
This announcement may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, including statements
regarding our expectations and beliefs regarding our future results or
performance. Because these statements apply to future events, they are
subject to risks and uncertainties. When used in this announcement,
the words "anticipate", "believe", "estimate", "expect",
"expectation", "project" and "intend" and similar expressions are
intended to identify such forward-looking statements. Our actual
results could differ materially from those projected in the
forward-looking statements. Additionally, you should not consider past
results to be an indication of our future performance. Factors that
might cause or contribute to such differences include, among others,
our ability to: increase revenues; generate high margin sponsorship
and multiple revenue streams; increase visitors to our Web sites
(www.alloy.com, www.delias.com, and www.ccs.com) and build customer
loyalty; develop our sales and marketing teams and capitalize on these
efforts; develop commercial relationships with advertisers and the
continued resilience in advertising spending to reach the teen market;
manage the risks and challenges associated with integrating newly
acquired businesses; and identify and take advantage of strategic,
synergistic acquisitions and other revenue opportunities. Other
relevant factors include, without limitation: our competition;
seasonal sales fluctuations; the uncertain economic and political
climate in the United States and throughout the rest of the world, and
the potential that such climate may deteriorate further; and general
economic conditions. For a discussion of certain of the foregoing
factors and other risk factors see the "Risk Factors That May Affect
Future Results" section included in our annual report on Form 10-K for
the year ended January 31, 2005, and in subsequent filings that we
make with the Securities and Exchange Commission. We do not intend to
update any of the forward-looking statements after the date of this
announcement to conform these statements to actual results, to changes
in management's expectations or otherwise, except as may be required
by law.
CONTACT: Alloy, Inc.
Gary Yusko, 212-329-8431
SOURCE: Alloy, Inc.
