Somerset Entertainment Income Fund
TSX : SOM.UN

Somerset Entertainment Income Fund

July 03, 2009 16:34 ET

Somerset Entertainment Income Fund Announces the Acquisition of Puretracks

TORONTO, ONTARIO--(Marketwire - July 3, 2009) - Somerset Entertainment Income Fund (TSX:SOM.UN) -

NOT FOR DISTRIBUTION TO U.S. WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Somerset expands as a digital music service provider for brands and retailers with the acquisition of Puretracks.

- Puretracks' technology platform and licensed catalogue immediately makes Somerset one of North America's leading digital music providers

- Somerset's digital strategy will be greatly enhanced by the addition of Puretracks

- Somerset's retail relationships and niche lifestyle music catalogue create new opportunities for Puretracks to develop private label sites and deploy targeted digital music incentive programs

- $3 million purchase price for 100% of Puretracks shares on a debt free basis

Somerset Entertainment Income Fund ("Somerset" or the "Fund") announced today that it has indirectly acquired 100% of the shares (the "Acquisition") of Puretracks Inc. ("Puretracks") from majority shareholder Bell Canada.

Puretracks is a leading North America digital music provider with a library of 3.4 million songs licensed from all four major music labels and several independent companies. With 2008 revenue of $5.6 million, Puretracks has MP3 and WMA licensing rights for both the United States and Canada. It focuses on the development and delivery of customized music solutions for top-tier companies. The Puretracks platform is reliable and robust, capable of supporting a wide range of digital music programs. As a leader in this growing market, Puretracks provides incentive and loyalty programs for major brands, private label download stores, album card redemption platforms, and subscription services as well as its own online music store. For the Puretracks online store, please visit www.puretracks.com, and for corporate information on Puretracks and details about products and services, please visit http://corporate.puretracks.com.

Founded as a streaming service in 1999, Puretracks launched Canada's first digital download store in 2003. Puretracks subsequently created a subscription service platform for the Sympatico portal. The company gradually developed a B2B focus. In 2008, Bell decided the business was not core to its strategy and, together with its partners, initiated a sale process.

"With the addition of Puretracks, Somerset becomes a unique player in the music industry with both a niche physical and digital strategy. Puretracks' carrier-grade technology platform and digital music services expertise will enable Somerset to offer an entirely new suite of programs to our existing customer base. With a digital store offering 3.4 million songs, Somerset will be able to provide retailers a complete music solution that bridges the physical and digital space." said Andy Burgess, CEO of Somerset.

Andrea Ziegler, CEO of Puretracks stated, "We are excited to have this opportunity to leverage Somerset's strengths to broaden Puretracks customer relationships and to take advantage of significant cross-selling opportunities. Puretracks has recently closed a lot of new business and is in discussions with several potential customers. Somerset's experience in growing their business will be important as Puretracks enters its next phase of growth."

The purchase price of $3 million will be funded using Somerset's current cash reserves and existing credit facilities.

ABOUT SOMERSET ENTERTAINMENT INCOME FUND

Somerset is the leading North American producer and distributor of specialty music and DVDs sold internationally through non-traditional music retailers using interactive displays and a distributor of music in digital format to consumers. Somerset's extensive distribution network includes mass merchants, specialty chains and independent gift stores in more than 20 countries, including the United States and Canada. Based in Toronto, Canada, Somerset employs over 180 people at offices in Toronto, Ontario (Canada); Buffalo Grove, Illinois, and Minneapolis, Minnesota (U.S.A.); and Essex, England (U.K.).

ABOUT PURETRACKS

Puretracks is a leading North American digital music service provider offering a comprehensive suite of solutions to clients - including branded digital entertainment stores, customized promotions, album card redemption platforms, web services and affiliate programs. The Puretracks music store is one of the largest digital music download stores in North America, offering more than three million tracks from top mainstream and indie artists across a complete range of genres. Puretracks is based in Toronto, Ontario, Canada, and employs over 25 people.

FORWARD LOOKING STATEMENTS

Certain statements in this news release may constitute "forward looking" statements that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Fund or Somerset to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. When used in this news release, such statements use such words as "may", "will", "intend", "should", "expect", "believe", "plan", "anticipate", "estimate", "predict", "potential", "continue" or the negative of these terms or other similar terminology. These statements reflect current expectations regarding future events and operating performance and speak only as of the date of this news release. Forward looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward looking statements, including, but not limited to, customer concentration, integration of the Puretracks business following closing, lack of written customer contracts, reliance on suppliers and other risks described in the Fund's most recent management's discussion and analysis (which can be found at www.sedar.com). These forward looking statements contained in this news release are made as of the date of this news release, and neither the Fund nor Somerset assume any obligation to update or revise them to reflect new events or circumstances.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities described herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification or registration under applicable securities laws of any such jurisdiction. The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933 (the "Securities Act") and may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of Securities Act.

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