<A HREF="http://www.billboard.com/bb/biz/newsroom/retail_marketing/article_display.jsp?vnu_content_id=1000717498">As first reported here</A>, Alliance Entertainment Corp. and publicly traded Source In

As first reported here, Alliance Entertainment Corp. and publicly traded Source Interlink Cos. have agreed to merge, in a deal that will result in a company with $1.3 billion in revenues.

The equity holders of Alliance -- the Yucaipa Cos. and its investment partners -- and those of Source Interlink will each hold 50% of the fully diluted capitalization of the combined company at the closing, according to a statement. The deal is expected to close in March 2003.

Source Interlink, which trades under the symbol SORC, is a direct-to-retail magazine distribution/fulfillment company and a provider of magazine information and front-end management services for retailers. It sells to many of the same customers as Alliance, including Barnes & Noble, Borders and the Musicland Group.

Source Interlink stock closed today (Nov. 18) before the deal was announced at $10.80, down four cents from the previous day's close, giving it a market capitalization of $253 million.

Leslie Flegel, chairman/CEO of Source Interlink, will lead the combined company, while Alan Tuchman, Alliance's president/COO, will join Source Interlink as executive VP, overseeing Alliance operations. Source Interlink will close its Bonita Springs, Fla., headquarters, and the Alliance headquarters and warehouse will remain in Coral Springs, Fla.

The Source Interlink board of directors is expected to increase to 11 members, six designated by Source Interlink and five by Alliance.

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