MONTREAL, Jan. 21 /CNW Telbec/ - Montec Holdings Inc. ("Montec") (TSX-V : MTE), a holding company focused on acquiring and developing a diversified portfolio of high-growth technology companies, is pleased to announces that it has entered into a definitive share purchase agreement with the minority shareholders of Datex Billing Services Inc. ("Datex") under which the parties have agreed to the terms and conditions for the acquisition by Montec of the remaining 49% of Datex held by its minority shareholders. Montec currently holds 51% of Datex' outstanding shares. Closing of the transaction is expected to occur shortly.
The proposed acquisition was previously disclosed in a press release dated April 1, 2008; however, in light of continuing discussions among the parties and current market conditions, the parties revised certain terms of the transaction. Accordingly, Montec will now acquire the common and preference shares of Datex that it does not already own for a total of $2.25 million, payable substantially in shares of Montec - being $500,000 in common shares of Montec and $1,750,000 in Series B Preferred Shares of Montec.
The Montec shares to be issued have an issue price of $0.08 per share and accordingly, 6,250,000 common shares and 21,875,000 Series B Preferred Shares will be issued. Of the 21,875,000 Series B Preferred Shares to be issued, Montec will convert certain of the Series B Preferred Shares into a number of its common shares such that following the closing of the transaction and the concurrent private placement and debt settlement described below, the minority shareholders, on the one hand, and Mr. Myer Bentob, Montec's Chairman and Chief Executive Officer, on the other hand, will own an equal number of common shares of Montec (the "Equalization Principle"). The balance of the 21,875,000 Series B Preferred Shares not otherwise converted pursuant to the Equalization Principle, shall be issued to the minority shareholders.
The Series B Preferred Shares of Montec will have terms and conditions substantially similar to the issued and outstanding Series A Preferred Shares, with the exception that the Series B Preferred Shares will automatically convert into common shares of Montec on a one-for-one basis on the earlier of (i) the record date established for the 2009 Annual and General Meeting of the shareholders of Montec and (ii) May 1, 2009. The parties have agreed that until such time, the minority shareholders and Mr. Myer Bentob shall own an equal number of Montec common shares.
The purchase price may be increased over time by a maximum of $1,250,000, pursuant to an earn-out formula based on Datex' net earnings. The earn-out formula is the same as that which was agreed to in December 2006 at the time of the acquisition by Montec of its 51% interest in Datex.
The agreement further sets out that Mr. Jim Dawson, the President of Datex, will become the President of Montec at the closing of the transaction. Mr. Myer Bentob will remain as the Chief Executive Officer of Montec until the 2009 Annual and General Meeting of shareholders.
It is expected that after the closing of the transaction, Montec's board of directors will consist of Mr. Jim Dawson, Mr. Myer Bentob and four independent directors, including Mr. David Williams and Dr. Rosemonde Mandeville. The remaining two independent directors will named as soon as practicable after the closing but, in any event, no later than January 31, 2009.
Concurrent with the closing of the transaction, Mr. Myer Bentob will subscribe for a total of 5,000,000 common shares of Montec at a price per share of $0.08, for gross proceeds to Montec of $400,000. It is expected that Montec will use the proceeds from the private placement for working capital and to pay down its existing line of credit.
Montec has also agreed to settle an aggregate of $170,000 in advances from Mr. Myer Bentob by issuing a total of 2,125,000 common shares at a deemed issue price per share of $0.08.
The TSX Venture Exchange ("TSX-V") has conditionally approved the acquisition described herein, subject to Montec filing normal course documentation with the TSX-V post closing. The private placement and debt settlement is subject to regulatory approval, including that of the TSX-V.
"We are very pleased to have signed the definitive agreement with the Datex minority shareholders", said Myer Bentob, Chairman and Chief Executive Officer of Montec. "We have entered into this transaction in order to increase Montec's ownership of Datex from 51% to 100% because we believe that it will enhance the growth potential and profitability of Montec, and thereby increasing shareholder value," added Mr. Bentob.
"We look forward to completing this transaction with Montec as soon as possible" said Jim Dawson, President of Datex. "The fact that Montec wishes to increase its ownership of Datex is a compliment to the entire Datex team."
About Montec Holdings Inc.
Montec's (TSX-V: MTE) objective is to create shareholder value by building a profitable technology entity with high- growth potential. Structured as a holding company, Montec's mandate is to acquire synergistic, profitable companies in the technology sector to maximize efficiencies and shareholder value. For more information about Montec Holdings Inc., please visit our website at www.montecholdings.com
Forward Looking Statements
This press release contains forward-looking statements which reflect the Company's current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual results could differ materially from those projected herein. The Company disclaims any obligation to update these forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
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