LONDON (ShareCast) - (Sharecast News) - Craven House Capital has simultaneously exercised five option agreements to acquire shareholdings in a number of private companies, it announced on Friday, where the shares being acquired represent a 29.9% shareholding in each company.
The AIM-traded firm said the respective acquisitions were negotiated with the support of advisors in the UK and Sweden, with which it was developing a strategy to build a "broad-based" e-commerce and online media business.

It said the first was Garimon, the owner of 'Magazinos.com', which Craven House described as the world's largest-by-content on-line media magazine and periodical content provision service.

While pre-revenue, Garimon's unaudited results for the six months ended 31 January showed a loss of ?55,393, and a net asset value of ?160,299.

The second acquisition was a holding in Onebas.com, which owns an "optimised search engine" providing a portal to music content freely circulating online.

It was also pre-revenue, with Onebas.com's unaudited results for the three months ended 31 January showing a loss of ?36,478 and a net asset value of ?117,617.

Thirdly, Craven House had acquired a holding in IZYRadio, which is a UK and Sweden-based B2B and B2C venture, established to deliver "the next generation" of music applications.

The company said IZYRadio offered "superior" music quality and music videos to radio stations.

It was also pre-revenue, with its unaudited results for the four months to 31 January showing a loss of ?22,838 and a net asset value of ?63,499.

The fourth acquisition was a holding in Rosedog, which owns 'Pro Vitos', an online marketer of vitamins and diet supplements from the north of Norway.

Another pre-revenue company, Rosedog's unaudited results for the six months ended 31 January showed a loss of ?24,143 and a net asset value of ?56,650.

Finally, the company acquired a holding in YRRO, which owns 'North Doctor', a service designed to help people make primary care appointments online at convenient times.

Another pre-revenue firm, YRRO's unaudited results for the six months ended 31 January showed a loss of ?25,883 and a net asset value of ?53,678.

In accordance with the terms of the options, Craven House acquired a 29.9% stake in each of the five companies for a consideration of $1.6m, equating to a total consideration of $8m.

Prior to exercise of the option, each target company was owned by different shareholders, with no cross-holdings between the target company shareholders.

The entire consideration was paid from the proceeds of a simultaneous share subscription by the sellers of the respective shareholdings for 800,000 new ordinary shares in Craven House, priced at $10 per share, making for an aggregate subscription of $8m.

Craven House said the shares issued under the subscription represented 20.7% of its enlarged share capital, based on the current number of shares in issue, being 3,063,589.

The firm said the investees were all currently loss-making, although their cost bases were said to be low, adding there was "minimal" committed future expenditure, meaning that the extent and timing of Craven House's and the existing shareholders' further investment in the businesses were "highly controllable".

While the company said it accepted that the market's valuation metrics for such businesses were different to the metrics applied to traditional enterprises, it was still the intent of Craven House and the incumbent managements of the investee companies to work together for the businesses to become financially self-sustaining, and generating surpluses within the short- to medium-term, as well as to crystallise additional capital value for shareholders through strategic, third-party partnerships.

"We are pleased to announce completion of these transactions which provide the company with meaningful shareholdings in five exciting e-commerce businesses," said Craven House non-executive director Mark Pajak.

"We look forward to announcing future growth plans for these companies in due course."

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE