MoviePass Parent Acquires Moviefone in Deal With Verizon’s Oath

MoviePass is saying “Hello — and welcome to Moviefone!”

Helios and Matheson Analytics, the majority owner of MoviePass, announced the acquisition of Moviefone from Verizon’s Oath subsidiary. Under the terms of the deal, Helios and Matheson is paying Verizon $1 million in cash and granting 2.55 million common shares (worth less than $8 million at HMNY’s current stock price). In addition, Verizon has the option to acquire an additional stake in Helios and Matheson, through warrants to purchase stock worth $14 million (at an exercise price of $5.50 per share), according to a regulatory filing. Verizon’s ownership of HMNY shares is subject to a lockup until April 4, 2019.

However the economics of the deal shake out, it represents a substantial decline in value for Moviefone, the pioneering interactive info service founded in 1989 — and which AOL acquired for $388 million in 1999.

Moviefone currently has 6 million monthly unique visitors. The site provides movie trailers, info on films and theaters, and ticketing (through Fandango). Helios and Matheson said the Moviefone acquisition is the next major step in building out its content-marketing strategy and advertising revenue platform for MoviePass, which sells a monthly subscription price to attend one movie screening in participating theaters per day. With its sizable audience, Moviefone also stands to serve as a lead generator for MoviePass subscriptions.

“This natural alignment between MoviePass and Moviefone will help us grow our subscriber base significantly and expand our marketing and advertising platform for our studio and brand partners,” MoviePass CEO Mitch Lowe said in a statement. “Moviefone has been a go-to resource for entertainment enthusiasts for years, and we’re excited to bolster its presence and bring this iconic platform into the entertainment ecosystem of the future.”

Under the pact, Oath will continue to sell Moviefone’s digital ad inventory. Helios and Matheson also has assumed certain liabilities related to the Moviefone assets.

MoviePass sold a majority ownership stake to Helios and Matheson Analytics for $27 million last summer. With Moviefone, “HMNY’s vision is to have MoviePass support the entire movie theater industry ecosystem — from distribution to exhibition and now, content,” said Helios and Matheson Analytics chairman and CEO Ted Farnsworth.

Meanwhile, Verizon bought AOL two years ago in a $4.4 billion deal, and merged AOL with Yahoo to form Oath. In 2014, AOL took Moviefone’s famous dial-up phone lines out of commission, after the original voice of Mr. Moviefone, co-founder Russ Leatherman, left in 2013.

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Source : http://za.gl/MAoYY9o

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