SOURCE: CMG Holdings, Inc

October 15, 2015 09:58 ET

CMG Holdings Group Signs Letter of Intent to Acquire Transmit Program Management LLC

CHICAGO, IL--(Marketwired - Oct 15, 2015) - CMG Holdings Group, Inc. (OTCQB: CMGO) today announced it has signed a letter of intent to acquire Transmit Program Management LLC ("TPM"), a provider of wireless construction management and network maintenance and monitoring services based in Cary, North Carolina. Transmit PM has an operational footprint in the mid-Atlantic and Southeast, including North Carolina, South Carolina, Alabama, Georgia, Florida, and Virginia. The Company was founded to fill the void in professional management in the wireless deployment industry, whilst its solutions are also applicable to wireline environments. Since inception, the Company's main focus has been the provision of Program, Construction, Maintenance and Quality management.

The Transmit PM Program Management Platform enables the Transmit PM team to deploy a fully operational quick response center anywhere in the country to lead a "Tiger Team" based program recovery within 24 hours:

Asset & technical team dispatch, monitoring and tracking,
Real time technical support of field forces to the ND-51 standard,
Logistics management, material procurement,
Accurate, real time activity, performance and closeout data collection and metrics,
Real time national weather monitoring to move assets around weather,
Experienced, program tested Tiger Teams trained to the ND-51 standard,
Highlight, document and prove systemic management issues and classify as internal to each organization, customer or vendor.

Transmit Program Management can get a MNO's network back to work quickly and effectively:

Survey failing or damaged sites,
Analyze and BOM subject sites,
Order, receive, manage & track materials inventory by site,
Ensure the work is performed completely and correctly the first time,
Provide each customer with complete and correct close-out documentation real time.

Recent projects include work for a leading national wireless broadband provider (alarm clearing, maintenance); UMTS work for the nation's largest incumbent communications provider; LTE and UMTS alarm clearing for a $1BN run rate communications project management firm in support of Tier I MNOs; CDMA/LTE alarm clearing for a world renowned communications equipment manufacturer; and numerous projects for regional carriers in Transmit PM's footprint. The Company has a stellar reputation in the industry. Since inception, Transmit PM has collected every penny invoiced. Transmit PM has never had an invoiced challenged and has never had an invoice unpaid.

Based on year-to-date results and before anticipated synergies, BHC is on pace to generate substantial profits, with EBITDA margins north of 40%. CMG is paying roughly 4.0x EBITDA in new class of preferred stock that will convert at 1.25 cents into common shares, seller notes and cash. Peak revenues and EBITDA were substantially higher based on prior cycle higher capital expenditure run rates across the wireless sector, during a time when Transmit PM was involved in sizable construction projects in addition to its highly profitable maintenance and support business.

Said Glenn Laken, "Our planned acquisition of Transmit PM is another hand in glove fit with our previously announced acquisitions of E&E Enterprises and Blue Horizon Concepts, located roughly three hours away from Transmit PM in Virginia. With this trio of synergistic businesses, we expect to move quickly to integrate the companies, diversify each business through cross-selling and collaboration on large projects in footprint and across the country, and achieve scale through a more balanced revenue mix and cash-flow profile.

As with BHC, the devastation of the Carolinas after recent deluges provides an opportunity for our family of companies to play a role in rebuilding and repairing critical infrastructure in the region. Looking ahead, we anticipate renewed investment activity by wireless carriers throughout the country as a result of a heightened focus on tower work and DAS spending, which should lead to revenue acceleration for our communications infrastructure group."

With these three businesses now under LOI, CMG's Communications Infrastructure group will be on track to generate substantial pro forma revenues during 2015, with the potential for 50%-100% annual top line growth for the next few years and positive free cash flow.

Glenn Laken, CEO of CMG Holdings Group, commented on the opportunities facing the organization: "We continue to be in various stages of discussions, negotiations and due diligence on several companies in the communications services, communications infrastructure, value-added services, and cyber-security markets that together represent a foundation off which we intend to build a substantially larger company focused on cyber infrastructure. That said, we believe these initial three businesses position us well to achieve the scope and scale necessary to be self-sufficient while attracting capital at reasonable costs. We are currently circling capital from institutional investors and intend to provide additional visibility on these companies' contracts and bookings to investors, with a goal of putting CMG onto firmer footing as a self-sufficient company. We aspire to become a leading player in the high growth markets for secure communications, connectivity and networking with anchor tenants in government, telco and enterprise markets."

Safe Harbor Statement:

CMGO cautions that statements made in press releases constitute forward-looking statements, and make no guarantees of future performances and actual results/developments may differ materially from projections in forward-looking statements. Forward-looking statements are based on estimates and opinions of management at the time statements are made.