MONTREAL, Nov. 16 /CNW Telbec/ - Mindready Solutions Inc. (TSX: MNY)
("Mindready") is pleased to announce the acquisition of UTTC United Tri-Tech
Corporation ("UTTC"), an electronics manufacturing services ("EMS") company
with sales of $50 million for the 12 months ended September 30, 2005, an
EBITDA(x) of $4 million and more than 200 employees. Closing is subject to
consent by UTTC's banking syndicate and customary conditions.
Headquartered in Cornwall, Ontario, UTTC is a leader in highly complex,
medium-volume products incorporating radio frequency and other high-end
technologies used primarily in the military and communications industries,
with a focus on rapidly growing wireless end-markets.
"This is a very exciting transaction for the shareholders of Mindready
and UTTC, creating a new company with the critical mass to compete effectively
in high-growth markets," said Claude Delage, president & CEO of Mindready.
"UTTC has strong customer relationships with leading Original Equipment
Manufacturers ("OEM") and a very capable team with many years of operational
experience in high technology. The two companies are an excellent strategic
and operational fit."
Servicing leading OEMs in the wireless telecommunication and military
electronics markets, UTTC offers design, prototyping, full turn-key
manufacturing, new product introduction, system integration and testing,
engineering support, supply chain management, final system assembly and after
sales support. Its customers include Ultra Electronics (formerly Canadian
Marconi Corporation), EMS-Technologies, NCR, the US military, Verizon, AT&T
and JDS Uniphase. The majority of its EMS revenue is secured by long-term
agreements that include negotiated price levels and inventory management
terms.
UTTC also has its own line of microwave products that are designed and
marketed through its Northern Radio and Wireless (NRW) division in Montreal,
Quebec. NRW has networks deployed in Caribbean and Latin America, North
America and Asia.
"We were attracted to Mindready because of a common vision to grow, the
complementarity of our business models and the financial flexibility offered
by their public platform," said Joseph A. Ippoliti, president & CEO of UTTC.
"This transaction allows us to accelerate growth in the U.S. market and to
expand internationally."
Under the terms of the transaction, UTTC shareholders will receive
10,891,089 common shares of Mindready and 2,000,000 warrants exercisable at a
price of $1.01 with a term of three years, for a total consideration of
$11.0 million.
Assuming the exercise of all the warrants, Mindready would issue
12,891,089 common shares representing approximately 86.5% of its currently
issued and outstanding common shares. The transaction requires security
holders' approval under the rules of the Toronto Stock Exchange. In compliance
with section 604 (d) of the Toronto Stock Exchange Company Manual, Mindready
has received written confirmation from holders of more than 50% of the voting
securities of Mindready confirming that they are familiar with the terms of
the proposed transaction and are in favor of it.
John D. Lutsi, managing director of Morgenthaler Ventures Partners will
be nominated as director of Mindready following the closing of the
transaction. Joseph A. Ippoliti and Gilles Charbonneau, respectively CEO and
COO of UTTC, will become members of Mindready's executive team.
The proposed transaction will have the following effect on the control of
Mindready:
<<
Before the proposed transaction
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Shareholder Shares Percentage
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Capital de Risque Dynamis Inc. 3 339 398 22.4%
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4310845 Canada Inc. 2 105 875 14.1%
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4160452 Canada Inc. 1 403 915 9.4%
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4173422 Canada Inc. 1 000 000 6.7%
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Public 7 046 087 47.4%
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Total 14 895 275 100.0%
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After the proposed transaction
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Shareholder Shares Percentage
-------------------------------------------------------------------------
CEM International, Inc. 5 472 600 21.2%
-------------------------------------------------------------------------
Capital de Risque Dynamis Inc. 3 339 398 13.0%
-------------------------------------------------------------------------
UTT Pharma Inc. 3 092 527 12.0%
-------------------------------------------------------------------------
4130944 Canada Inc. 2 171 349 8.4%
-------------------------------------------------------------------------
4310845 Canada Inc. 2 105 875 8.2%
-------------------------------------------------------------------------
4160452 Canada Inc. 1 403 915 5.4%
-------------------------------------------------------------------------
4173422 Canada Inc. 1 000 000 3.9%
-------------------------------------------------------------------------
Public 7 200 700 27.9%
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Total 25 786 364 100.0%
-------------------------------------------------------------------------
>>
CEM International, Inc. is controlled by Morgenthaler Ventures Partners,
a Silicon Valley-based venture capital firm. Capital de Risque Dynamis Inc. is
controlled by Michel Gaucher, the chairman of the board of Mindready, UTT
Pharma Inc., 4310845 Canada Inc., 4130944 Canada Inc., 4160452 Canada Inc. and
4173422 Canada Inc. are controlled by the executive teams of Mindready and
UTTC.
(x) EBITDA (defined as earnings before interest, taxes, depreciation and
amortization) is not calculated in accordance with GAAP and there is no
standard definition of this term. Accordingly, it is unlikely that comparisons
can be made among different companies that present EBITDA. Mindready believes
that EBITDA is a useful measure because it excludes items that are not typical
of ongoing operating activities as well as items that are outside management's
control.
About Mindready
Mindready Solutions Inc. (TSX: MNY) is a leading supplier of innovative
solutions for test and embedded systems serving the aerospace & defense,
automotive & transportation and telecommunications markets from design to
manufacturing. Mindready clients include companies such as Lockheed Martin,
Raytheon, Northrop Grumman, Boeing, Visteon, NASA, Ford, Nissan, Motorola,
Panasonic, Rockwell Collins, Renault, Harris, Flextronics, Nortel and Alcatel.
More information about Mindready and its products, systems and
engineering services can be found at www.mindready.com.
About UTTC
UTTC is an EMS and OEM Product company headquartered in Cornwall,
Ontario. The Company offers a broad range of products and services to leading
OEMs in the wireless and military electronics markets. These products and
services include: design, prototyping, full turn-key manufacturing, new
product introduction, system integration and testing, engineering support,
supply chain management, inventory management, printed circuit board assembly,
final system assembly, packaging, distribution and after sales support. The
Company has established a leadership position in highly complex, medium-volume
products incorporating radio frequency ("RF") and other high-end technologies
used primarily in the military and communications marketplaces, with
particular emphasis on the wireless end-markets. The Company's principal
strengths include its customer relationships with leading OEMs such as Ultra
Electronics, EMS-Technologies, NCR and other customers such as the US
military, Verizon, AT&T and JDS Uniphase.
The Company employs over 200 employees and owns its 83,000 square foot
manufacturing facility. In addition to that, it leases a 10,000 square foot
warehouse for inventory, a 9,000 square foot facility in Montreal as well as
an office in Shanghai, China.
More information about UTTC and its products, systems and engineering
services can be found at www.uttc.ca and www.northernradio.ca
(x) Forward-looking statements contained in this press release involve
known and unknown risks, uncertainties or other factors that may cause actual
results, performance or achievements of the company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements.
%SEDAR: 00015196EF
