Combined co. will operate under Amplified name

Amplified Holdings is expected to announce today that it has acquired music, homevid and vidgames e-tailer Checkout.com in a stock deal that will shutter the moniker as an online consumer brand.

Atlanta-based Amplified plans to use the technology assets of Checkout, which was launched in 1999, by Michael Ovitz and the Yucaipa Cos.’ Richard Wolpert, to boost its online distribution and e-commerce services for the entertainment and retail industries.

Although financial terms of the takeover were not disclosed, the combined company will operate under the Amplified name and will maintain an office in Los Angeles. Checkout’s 50 staffers are expected to remain with the company. Together Amplified and Checkout will employ 140.

Amplified is a digital media services provider, offering technology services to clients looking to operate stores on the Web. It also has offices in San Diego, New York and Fairfax, Va.

Until now, Amplified has mainly provided digital downloads, digital rights management, streaming, encoding, jukebox solutions, traffic monitoring, data hosting and infrastructure services to record labels and other music clients, including EMI, Jive Records, Hollywood Records and LaFace Records. With Checkout, Amplified is looking to broaden its client base beyond music.

Amplified will continue to provide offline distribution of entertainment products — including CDs, DVDs, VHS cassettes and other merchandise to customers who place orders online — through its close relationships with Valley Media Inc.

Wherehouse deal

Checkout inked a deal with Wherehouse Music in 1999, making it the music seller’s official online e-tailer. As a result of Amplified’s acquisition, Wherehousemusic.com will become a client of the newly merged company.

Amplified said that it was attracted to the e-commerce platform Checkout had built to be used by multiple clients.

“It has the most comprehensive retail infrastructure in the industry,” said Chris Melton, CEO of Amplified. “With this combination, Amplified will significantly expand the products and services offered to the retail and entertainment industries.

“It’s no secret that retailers are looking for assistance in improving functionality while reducing the costs of their online businesses. The costs of building and maintaining them has gotten to a point where it’s unaffordable. This acquisition allows us to offer both seasoned talent to solve these problems and a solid technology platform to meet the immediate needs of an online retail operation cost effectively.”

Owners in privately held Checkout also include Constellation Ventures, Psilos Group, Noro-Moseley Partners, Draper Atlantic, Cerberus and Valley Media Inc. Constellation and Valley also hold large stakes in Amplified. Yucaipa and Cerberus will become shareholders in Amplified.

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