Acorn Closes Acquisition of Yiyang Yukang, a Domestic Communication Equipment Producer and Distributor in China

Acorn Closes Acquisition of Yiyang Yukang, a Domestic Communication Equipment Producer and Distributor in China

SHANGHAI, China, Dec. 29 /PRNewswire-Asia-FirstCall/ -- Acorn International, Inc. (NYSE:ATV) ("Acorn" or the "Company"), a leading integrated multi-platform marketing company in China engaged in developing, promoting and selling consumer products and services, announced today the completion of its acquisition of Yiyang Yukang Communication Equipment Co. Limited ("Yiyang Yukang"), a domestic communication equipment producer and distributor in China, on December 24, 2008, pursuant to the terms of the definitive agreement entered into on December 18, 2008.

Acorn believes the acquisition will provide it a strong pipeline of mid- to-high end, differentiated and branded mobile handset products as well as strengthen Acorn's existing distribution capability in China.

Under the agreement, Acorn has acquired Yiyang Yukang for consideration of $6.7 million in cash and 2,564,103 of its ordinary shares ("Ordinary Shares") valued at a price of $3.12 per share (or $9.36 per each of Acorn's American Depositary Shares), and shall pay up to an additional three earn-out payments equivalent to the maximum amount of US$44.1 million in a combination of cash and Ordinary Shares (valued at a price of $3.12 per share), contingent on Yiyang Yukang meeting certain earnings targets in 2008, 2009 and 2010 for each earn-out payment. Additionally, Yiyang Yukang shall cause its board of directors to resign, and Acorn shall have the right to appoint a majority of new board members, with the remaining to be appointed by Yiyang Yukang. The Ordinary Shares issued and to be issued in the acquisition are issued outside of the United States to non-U.S. persons and have not been registered under the Securities Act of 1933, as amended ("Securities Act") and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the Securities Act.

About Acorn

Acorn is a leading integrated multi-platform marketing company in China, operating China's largest TV direct sales business in terms of revenues and TV air time and a nationwide off-TV distribution network. Acorn's TV direct sales platform consists of airtime purchased from both national and local channels. In addition to marketing and selling through its TV direct sales programs and its off-TV nationwide distribution network, Acorn also offers consumer products and services through catalogs, outbound telemarketing center and an ecommerce website. Leveraging its integrated multiple sales and marketing platforms, Acorn has built a proven track record of developing and selling proprietary-branded consumer products, as well as products and services from established third parties.

   For more information, please visit http://www.chinadrtv.com/ .    Safe Harbor Statement  

Statements in this release contain "forward-looking" statements. These statements are made under the "safe harbor" provisions of the U.S Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Statements that are not historical facts, including statements about Acorn's beliefs and expectations, are forward-looking. These statements include, among others, statements regarding the benefits of the proposed transaction, such as our ability to successfully continue to grow our business through our investment in Yiyang Yukang, strengthen our mobile handset business, improve our leadership position in marketing and distribution of mobile handsets and build long-term shareholder value. Actual results may vary considerably; the transaction may not close when expected or at all, and may not generate the anticipated benefits, including increasing our ability to market mobile handsets, broadening our distribution capabilities in mobile handsets and generating shareholder value. In addition, Acorn's industry is highly competitive and it faces a number of risks and uncertainties, including those outlined under "Risk Factors" beginning on page 6 of Acorn's annual report on Form 20-F filed with the Securities and Exchange Commission on May 30, 2008. All information included in this press release is as of the date of this press release, and Acorn undertakes no duty to update such information, except as required under applicable law.

   For more information, please contact:    Acorn International    Chen Fu, Director of Investor Relations    Tel:   +86-21-5151-8888 x2228    Email: ir@chinadrtv.com    PRChina    Jane Liu    Tel:   +852-2522-1838    Email: jliu@prchina.com.hk     Henry Chik    Tel:   +852-2522-1838    Email: hchik@prchina.com.hk  

Source: Acorn International, Inc.

CONTACT: Acorn International - Chen Fu, Director of Investor Relations,
+86-21-5151-8888 x2228, or ir@chinadrtv.com; or PRChina - Jane Liu, +852-2522-
1838, or jliu@prchina.com.hk; or Henry Chik, +852-2522-1838, or
hchik@prchina.com.hk

Web site: http://www.chinadrtv.com/

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Profile: International Entertainment