Outdoor Channel Holdings to Merge with Sportsman Channel

Transaction, Resulting in InterMedia Outdoor Holdings, Expected to Close in Q1

Outdoor Channel Holdings Inc. will merge with InterMedia Outdoors Holdings, LLC to form a behemoth multiplatform company, retaining a pair of linear networks that will continue to serve genre enthusiasts.

The deal, which is expected to close in the first quarter of 2013, will create InterMedia Outdoor Holdings, Inc., with the expectation it will be listed for trading on NASDAQ.

This transaction unites industry leaders in outdoor television, print, digital and social media, as well as editorial and content production for the hunting, shooting, fishing and conservation categories. Outdoor Channel, which currently counts some 38 million subscribers, and the 30- million-home Sportsman Channel, will continue to operate as separate channels.

An investor call will be held at 10 a.m. (ET)

InterMedia Outdoors, Inc., a multi-media company that publishes 15 market leading outdoor magazines and 20 leading websites, is controlled by InterMedia Partners VII, L.P., Leo Hindery’s private equity investment fund. Outdoor Channel Holdings controls Outdoor Channel, as well as outdoorchannel.com.

InterMedia Partners VII, L.P. and the minority members of IMOH LLC will own 67.6% of IMOH Inc.

The transaction will take the form of a cash and stock election merger in which the company's stockholders will be entitled to receive for each share, subject to proration, either $8 in cash or one share of stock in IMOH Inc. An aggregate of $115 million will be available for the company's stockholders electing cash. Stockholders are expected to own approximately 32.4% of IMOH Inc. In connection with the transaction, the company's board has also approved a 25 cent per share special dividend which will be paid on or about Dec. 7, 2012 to stockholders of record as of the close of business on Nov. 27.

IMOH LLC has secured a $150 million fully committed financing from CIT Communications, Media & Entertainment to finance a portion of the merger consideration and to refinance the outstanding debt of InterMedia Outdoors, Inc.

Following the close of the transaction, Tom Hornish, president and CEO of Outdoor Channel Holdings, will serve as CEO, while Outdoor CFO/COO Tom Allen will hold those positions in the new company. Gavin Harvey, currently Sportsman CEO, will be president, television networks, while InterMedia Outdoors CEO Jeff Paro will become president, publishing, integrated media and branded content.

“This is a logical and highly complementary transaction that creates an exceptional multimedia organization optimally positioned to serve the huge and growing outdoor lifestyle category,” said Hornish in a statement. “Combining the resources of these three companies will allow us to better serve the consumers, distributors and advertisers in this robust marketplace. We will have the highest quality content, the top brands and the greatest reach. In turn, we also strengthen our ability to invest in our assets, expand our distribution and drive further returns for our shareholders."

Noted Paro: "This is the culmination of a long and dedicated effort by our team to build a truly multimedia enterprise. IMOH Inc. will serve all of its consumers in all media across all platforms. National and endemic advertisers will have unprecedented opportunities to reach our very large and attractive consumer base."

Harvey, who formerly led outdoor category advocate OLN, now NBC Sports Network, added: "We built Sportsman from a small cable network five years ago into one of the preeminent brands in the outdoor space. I am excited by what we have achieved and even more excited about the prospects for the combined company. The marriage of two cable networks with the reach and brands of InterMedia Outdoors is a truly unique proposition in the cable media landscape."