blu to acquire viva9 and bluearc group

BlueFreeway (ASX: BLU) Announcement
BlueFreeway to acquire Viva9 and BlueArc Group BlueFreeway cements its position as the leading provider of digital marketing services in Australia and sets its sights on further international expansion
Sydney, Australia – Wednesday 6th June 2007: BlueFreeway (ASX: BLU), an independent global provider of digital marketing services, is pleased to announce that it has completed agreements to acquire a market leader in performance based and affiliate online marketing, Viva9 and BlueArc Group, a leading provider of integrated technology and communications solutions.
The combined revenue of the two companies is forecast to contribute an additional $9.7m to the BlueFreeway group, which represents a 28 per cent increase on the company’s pro forma revenue forecast of $34.5m in the 2007 financial year. The acquisitions expand BlueFreeway’s suite of products and service offerings and positions the group as one of the most comprehensive digital marketing solutions providers in the world.
BlueFreeway last week announced an upgrade to its forecast earnings, which are anticipated to increase by 25 per cent, from $3.6m to $4.5m, for the period ending June 2007. This upgrade was largely a result of organic growth across the first ten companies that made up BlueFreeway and represents a like-for-like (pro forma) basis increase in revenue and EBIT (excluding outside equity interest) by 66.7 per cent and 97.6 per cent respectively, over the same period last year, compared to overall industry growth of approximately 55 per cent per annum. The impact of the Viva9 and BlueArc Group acquisitions was not factored into the earnings upgrade.
Viva9 and BlueArc Group are profitable and the acquisitions are expected to be revenue and earnings accretive to BlueFreeway in the 2008 fiscal year.
BlueFreeway will acquire 100 per cent of Viva9, comprising cash and scrip issued over three years; and 51 per cent of BlueArc, with additional payments as per the BlueFreeway earnout model over a three-year period; for a combined sum of $6.1m.
The acquisition of Viva9 and BlueArc Group takes the number of companies in the BlueFreeway Group to 16, six of which have been acquired since the company listed on the Australian Securities Exchange (ASX) in December 2006. BlueFreeway Chief Executive, Richard Webb, said: “These acquisitions cement our leadership position in Australia and we are now well positioned to take on our international competitors.” “Affiliate and performance based marketing is a cornerstone in today’s marketing environment. We are excited about taking Viva9’s proprietary technology to Asia, Europe and the North Americas. BlueArc brings unique infrastructure development skills to the group that we identified as being core to our client offering and our expansion plans.”

“Both of the acquisitions also bring highly specialised employee teams and enviable client registers. We are thrilled to have been able to complete these agreements prior to the conclusion of this financial year as we gear up for what is going to be a considerable year of growth for BlueFreeway.”
Viva9 has aggregated a number of online marketing companies and is now unquestionably the most significant player in the Australian online affiliate marketing space. It also has a presence in China. Brands in its stable of performance based marketing initiatives include Commission Monster, V9MediaNetwork, Monster Mall, Rewards Palace, and wildkard. Viva9’s proprietary technology and media solutions deliver performance-based enterprise management solutions to direct advertisers, advertising agencies, marketing communications companies, public relations agencies and other small, medium and large corporate advertisers. Viva9 offers advertisers integrated marketing solutions via its affiliate, lead generation, brand, search and email services. This enables Viva9 publishers and affiliates greater opportunities to maximise revenue from their website assets. Viva9 has portfolio of over 2,000 customers which include blue chip brands such as Citibank, ANZ, HSBC, Singapore Airlines, ACNielsen, Australia Post, Express Publications and Morrison Media. Viva9 Chief Executive Officer, Shane Murray, is a veteran in the digital marketing space “BlueFreeway has been a force to be reckoned with since listing in December last year. The group has a unique model we believe will be successful both here and internationally and as our sites are firmly set on taking our marketing solutions rapidly off shore, especially into Asia, we are confident BlueFreeway is the right partner to accelerate our expansion plans”. BlueArc Group is a leading Sydney-based provider of integrated technology and communications solutions. It was established in 2004, with clients in Sydney, Melbourne, Brisbane, PNG and New Zealand; including Sunbeam, Allco Finance Group, Nokia, Sensis, BHP Billiton and Nestle Australia. BlueArc brings Advanced Infrastructure Solutions and Web Application Development capabilities to the BlueFreeway group along with its Microsoft Gold Partner status and its growing Microsoft Business Solution Practice. Its business straddles three divisions: Content Management; Business Solutions including Microsoft SharePoint and CRM; and Advanced Infrastructure solutions. BlueArc Group CEO Scott Porter, who was formerly the Director of Microsoft OEM Business for the America's and South Pacific Regions said: “BlueFreeway is a unique marketing services company because it has been founded on the principle that technology will be a key enabler for marketers. It places technology alongside creative, at the centre of its business, in a fashion that we consider unprecedented in the marketing industry”.
About Blue Freeway www.bluefreeway.com BlueFreeway (ASX: BLU) is an Australian-based independent global digital and interactive marketing communications company with stakes in a growing portfolio of digital and interactive marketing specialists, as well as BlueCentral, a leading hosting and business infrastructure company. The company has offices in Australia, the United States, the United Kingdom, France, China and India.
BlueFreeway offers a suite of end-to-end, internet and mobile marketing solutions, to major corporate and government advertisers. The Portfolio Companies in the BlueFreeway group include: Blackglass, BlueArc Group, BlueCentral, Cogentis, Communicator Interactive, Deepend Sydney, Digicon, eHound, Forty Two International, IBC, JSA Interactive, MassMedia Studios, SageMetrics, Spin Communications, Tentacle, and Viva9.

For BlueFreeway inquiries please contact
Ken McDonnell
Chief Finance Officer
Phone: +61 (2) 9336 8503
Mobile: +61 (41) 75 75 677
[email protected]