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Digital out-of-home provider TouchTunes to merge with Victory Acquisition Corp.

NEW YORK —TouchTunes Corp., one of the largest out-of-home interactive entertainment networks in America, and Victory Acquisition Corp., a specified purpose acquisition company, have announced that they have signed a definitive merger agreement.   Pursuant to the agreement, Victory will acquire TouchTunes for 33 million shares of Victory stock. Victory also will assume up to approximately $40 million in net debt. TouchTunes stockholders will also be eligible to receive up to an additional 9.5 million shares based on the achievement of certain future EBITDA targets over the next five years.   The combined company will operate as TouchTunes and is expected to trade publicly on the NASDAQ Stock Market or another national stock exchange. Its corporate headquarters will remain in New York and its main Canadian offices will continue to be based in Montreal.   TouchTunes provides solutions to more than 38,000 bars, restaurants, retailers and other businesses in North America. Its TouchTunes digital jukeboxes are an industry leader and play more than 700 million songs annually — second only to Apple’s iTunes in providing digital music.  Its newly introduced Barfly interactive television entertainment network is designed to allow advertisers to capture the coveted 21-34 year old demographic with its innovative screen-within-a-screen system. TouchTunes’ PlayPorTT  portable broadband entertainment systems have initially targeted national restaurant chains for its family-friendly series of over 50 proprietary video and electronic games. TouchTunes expects to have 1,500 PlayPorTT units deployed by the end of the second quarter of 2009.   “We are excited about the merger with Victory because it will allow us to access significant equity capital to leverage our existing installed customer base, and rapidly roll-out the Barfly and PlayPorTT product initiatives,” said William Meder, TouchTunes chairman and chief executive officer. “Our 38,000 locations generate over three billion consumer visits annually providing advertisers with exceptional opportunities to interact with consumers,” said Meder.   “TouchTunes’ opportunity to take Barfly and PlayPorTT from their initial pilot success and deploy them into TouchTunes’ existing 38,000 location base and beyond makes the marriage with Victory’s capital an outstanding investment proposition for our loyal shareholders,” said Jonathan J. Ledecky, president of Victory. “Our due diligence revealed several major national brands that are interested in advertising on the Barfly platform if it can scale to capture the customer visit traffic generated by an accelerated national roll-out schedule.”   The proposed transaction is subject to Victory receiving stockholder approval of the transaction and customary closing conditions. It is anticipated that Victory will mail a final merger proxy statement on or about April 13, 2009, with a stockholder vote and closing to occur by April 24, 2009.