Private Media Group Inc. (PRVT) News

BARCELONA, Spain, Nov. 11 /PRNewswire-FirstCall/ -- Private Media Group, Inc. (Nasdaq: PRVT) announced today that it has executed a binding letter of intent to acquire the operations of U.S. premier internet video on demand ('VOD') and eCommerce developer GameLink LLC and its related companies in exchange for common stock of Private. The acquisition is one of the most sizable in the industry and it will create a uniquely positioned, multi-faceted, global content, distribution and development Company in the adult entertainment sector.

Private is a leading brand-driven global content provider of adult entertainment to a wide range of platforms including mobile telephone handsets via 85 network operators in 36 countries, IPTV via 35 platforms in 18 countries, broadband Internet, television broadcasting, DVDs and magazines.

GameLink is the leading US adult entertainment VOD and eCommerce platform through its GameLink.com website. The site's installed user base represents over one million domestic and international customers and it serves over 10,000 users daily. Including 60,000 video titles, GameLink has the largest library of digital and physical adult media and novelties in the United States. The Company offers VOD in multiple media formats including streaming and downloads to computers and iPhones. GameLink's infrastructure is the most robust in the industry and is highly flexible, customizable and scalable designed to support multiple retail strategies and products simultaneously. Additionally, through its related companies, GameLink offers third-party and white-label ecommerce solutions and development.

The estimated combined pro-forma revenue of the two entities for 2007 was $53.8 million, with GameLink and its related companies representing 36%.

'We really look forward to combining GameLink and their unsurpassed digital distribution and development skills with Private,' said Private Media Group Chairman, President and CEO Berth Milton. 'GameLink is a highly complementary addition to our existing brand and operations and will allow a substantial acceleration of our ability to become the world leader in the digital adult media sector. The unique synergies of this transaction will create a major company with an unrivalled combination of content, brand and global reach, with both traditional and digital distribution channels and the best technical expertise. The acquisition of GameLink is a major step in an acquisition strategy to target leading companies and consolidate the fragmented adult entertainment sector. This undoubtedly will create an even more dominant global brand and substantially enhance shareholder value.'

Peter Cohen, COO, Private Media Group commented: 'The acquisition of GameLink by Private is a significant development that will substantially contribute to our growth and revenues, while creating economies of scale. We have been establishing our digital strategy for the last year, and concluded that the combination of Private with a major online retailer and accomplished platform developer is the approach to achieving our goals in the rapidly changing business landscape. The combined content assets of Private and core competencies of GameLink offer a compelling new business model. We will be expanding our joint internet strategies globally with new formats and applications to be launched in 2009. Additionally, we will be developing improved interactive functionality for new media platforms such as IPTV and mobile, and maximizing our content monetization with the existing vast Private library as well as aggregation of select international studios offering a wide range of content and genres for all platform needs. With this expanded digital strategic focus we will be announcing a variety of compelling new initiatives in the next few months.'

'The GameLink team is excited to join with Private and their unsurpassed brand in the adult market,' said Ilan Bunimovitz, President, CEO and founder of GameLink, LLC. 'GameLink has always focused on being the leader in VOD and eCommerce in the adult entertainment space. The combination of GameLink's digital focus and Private's brand, global reach and market leading content, will allow us to create the dominant company in adult entertainment going forward.'

The acquisition requires execution of a definitive agreement and further due diligence by Private. The agreement calls for the transaction to be completed by the end of 2008. GameLink was advised in the transaction by P. Holt Gardiner. For additional information regarding the proposed acquisition, please refer to the Company's Form 10-Q for the period ended September 30, 2008.

A previous step taken in the Company's acquisition strategy with respect to digital distribution is the stake acquired in mainstream online Video-On-Demand business Horse Creek Entertainment in December last year.

About GameLink, LLC

San Francisco based GameLink LLC and its related companies are one of the top three online retailers of adult entertainment products in the US. GameLink and its related companies currently have 70 employees. GameLink focuses on the digital distribution of adult films and media delivered over the Internet through its retail website http://www.GameLink .com. GameLink emphasizes the user's experience and service, and has established an industry leading reputation for innovation and leadership. GameLink has distribution agreements with every relevant adult content producer, and currently offers over 60,000 titles on its website, with content available in multiple popular media formats. Founded in 1993, GameLink was the first pure-play Internet retailer in the adult arena and has always been the technology and development leader in the adult Internet retail space. Visit http://www.gamelink .com for more information.

About Private Media Group, Inc.

With its 40 year track record, NASDAQ listed Private Media Group is a brand-driven world leader in adult entertainment and distributes premium quality content globally via a wide range of platforms including more than 900 million mobile telephone handsets, IPTV, broadband Internet, television broadcasting, DVDs and magazines. Private Media Group owns the worldwide rights to its extensive archive of high-quality content, and also licenses its Private and 'Silver Girls' trademarks internationally for a select range of luxury consumer products. Private is the world's preferred content provider of adult entertainment to consumers anywhere, at any time and across all distribution platforms and devices. Visit http://www.prvt.com for more information.

Disclaimer

This release contains, in addition to historical information, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect the Company's current judgments of those issues. However, because those statements are forward-looking and apply to future events, they are subject to such risks and uncertainties, which could lead to results materially different than anticipated by the Company.

     For further information please contact:
     Grupo Albion
     Miguel Vermehren
     mvermehren@grupoalbion.net
     +34 915 312 388

SOURCE Private Media Group