SOURCE: J.L. Halsey

August 21, 2006 20:45 ET

J.L. Halsey Acquires ClickTracks and Hot Banana

With More Than 13,000 Clients, Addition of Web Analytics and Web Content Management Companies Positions J.L. Halsey as Leading Provider of eMarketing Solutions to Mid-Size Businesses

WILMINGTON, DE -- (MARKET WIRE) -- August 21, 2006 -- J.L. Halsey Corporation (OTCBB: JLHY) announced today that it has acquired Web analytics leader ClickTracks Analytics, Inc. (www.clicktracks.com), of Santa Cruz, Calif., and eMarketing Web content management company Hot Banana Software Inc. (www.hotbanana.com), of Ontario, Canada. With more than 13,000 clients now, these acquisitions make J.L. Halsey one of the largest providers of marketing technology solutions to mid-market businesses. To finance these acquisitions, the Company closed a $10 million subordinated bridge loan.

The acquisitions of ClickTracks and Hot Banana are significant steps in the strategy of J.L. Halsey -- to become the leading provider of software solutions for digital marketers at mid-size businesses. The company is building on its existing portfolio of email marketing solutions, with an eye toward providing the key technologies that mid-size marketers need to produce greater return on investment from online marketing budgets. The company acquired email marketing leaders Lyris Technologies (www.lyris.com) and EmailLabs (www.emaillabs.com) in May and October 2005 respectively.

"J.L. Halsey is acquiring award-winning, innovative companies that specialize in sophisticated, but highly-usable marketing tools for mid-sized businesses," said David Burt, CEO, J.L. Halsey. "The acquisitions of ClickTracks and Hot Banana further our goal of providing a complete eMarketing toolset that directly increases the effectiveness and ROI of organizations' eMarketing spends. At the same time, by adding Web analytics and Web content management solutions we are extending our commitment to bringing distinct, best-of-breed marketing technologies under one roof for the benefit of the marketing community."

ClickTracks and Hot Banana Acquisition Terms

At the closing of the ClickTracks acquisition, Halsey paid the security holders of ClickTracks approximately $7.6 million in cash, issued to the security holders of ClickTracks who are "accredited investors" approximately $2.9 million worth of Halsey common stock (valued at a 30-day trailing average of Halsey's closing sale prices), agreed to pay to the security holders of ClickTracks who are not "accredited investors" a total of approximately $100,000 in cash, and agreed, in the event that certain milestones are reached over the next two years, to pay the owners of ClickTracks an additional $3,300,000 in earn-out payments. An additional $510,000 will be paid subject to working capital adjustments.

At the closing of the Hot Banana acquisition, Halsey paid the owners of Hot Banana approximately 1.9 million Canadian dollars in cash and will make installments totaling up to approximately 750,000 Canadian dollars if Hot Banana achieves specified revenue and technology integration targets in the first and second year following the closing. An additional 500,000 Canadian dollars will be paid subject to working capital and other adjustments.

Financing

To fund the acquisition of ClickTracks, the company has borrowed $10 million pursuant to a subordinated bridge loan from LDN Stuyvie Partnership, an entity affiliated with William Ty Comfort, the Company's Chairman of the Board. Together, LDN Stuyvie Partnership and Mr. Comfort own approximately 23% of the common stock of the Company. The bridge loan bears interest at 9.5%. The Company has separately announced a $20 million common stock rights offering at $0.85/share. LDN Stuyvie Partnership has agreed to backstop $10 million of the common stock rights offering. The Bridge Loan from LDN Stuyvie Partnership will be repaid with common stock and/or cash from the rights offering. The closing payments to the owners of Hot Banana were funded in part by drawdowns from Halsey's existing revolving line of credit with Comerica Bank.

About J.L. Halsey Corporation

J.L. Halsey (OTCBB: JLHY) is a leading eMarketing company that provides technology solutions for marketers at mid-size businesses. Halsey has more than 13,000 clients. Its wholly owned subsidiaries -- Lyris Technologies, EmailLabs, ClickTracks and Hot Banana -- provide a suite of best-of-breed tools for managing email marketing campaigns end-to-end, publishing and managing Web site content, creating landing pages, and optimizing sites based on sophisticated, yet easy-to-use Web analytics. Clients include Nokia, Adobe, PalmSource, Johns Hopkins University and Jupitermedia. For more information on the company and its subsidiaries and brands please visit www.jlhalsey.com, www.lyris.com, www.emaillabs.com, www.clicktracks.com, www.hotbanana.com and www.sparklist.com.

Cautionary Statement

Except for historical information contained herein, the statements in the press release are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements and the business prospects of the Company are subject to a number of risks and uncertainties that may cause the Company's actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, the following: Halsey has incurred significant debt to purchase ClickTracks; no information about ClickTracks or Hot Banana has been filed with the Securities and Exchange Commission; there are risks related to ClickTrack's and Hot Banana's businesses; and there are substantial risks that the Company will not be successful in integrating these new businesses into its existing portfolio. There can be no assurance that ClickTracks or Hot Banana will achieve the financial and business performance that Halsey anticipated when it agreed to purchase them. GAAP financial statements will be prepared and filed for these acquired entities after closing. Other risks related to Halsey are described in the J.L. Halsey Corporation 10-K report for the year ending June 30, 2005, and other filings with the Securities and Exchange Commission.

Contact Information

  • Media Contacts:

    Loren T. McDonald
    Chief Marketing Officer, J.L. Halsey
    650/388-3542
    Email Contact

    Ken Greenberg
    Edge Communications, Inc.
    818/990-5001
    Email Contact

    Investor Contacts:

    Neal Rosen
    Kalt Rosen & Company, LLC
    415/397-2686
    Email Contact

    Rich McDonald
    J.L. Halsey
    610/688-3305
    Email Contact