OTTAWA , Jan. 30 /PRNewswire-FirstCall/ - March Networks(TM) (TSX:MN; AIM:MNW), a leading provider of intelligent IP video and business analysis applications, announced today that it has entered into a definitive agreement to acquire Cieffe S.p.A. and its related company Insignis Technologies S.r.l.
Cieffe, based in Milan , Italy , develops high performance IP video surveillance solutions used by enterprise-class organizations across Europe , the Middle East and Asia Pacific. With a reputation for innovative design and advanced functionality, Cieffe's products are used by leading European financial institutions and a number of high profile airport, government and commercial industrial clients for mission-critical security applications. Cieffe's calendar 2007 revenue is estimated at (euro)10 million (CAD 14.7 million). Cieffe's pre-tax profit for the 10 months ended October 31, 2007 was approximately (euro)400,000 (CAD 600,000) and its net asset position at October 31, 2007 was approximately (euro)1.5 million (CAD 2.0 million).
Cieffe's award-winning portfolio of interoperable encoders, IP and megapixel cameras, video analytics and advanced video management software has received numerous industry accolades, including two consecutive best-of-show awards at IFSEC, one of Europe's most prestigious security industry events. The company is currently displaying its latest innovations, including the world's first Megapixel Speed Dome camera, at IIPSEC 2008 being held at Stoneleigh Park, Coventry, UK, through to January 31 .
The agreement calls for the payment by March Networks of (euro)14.0 million in cash and (euro)6.0 million in common shares for a total purchase price of (euro)20.0 million plus an earn-out component of up to (euro)10.0 million in cash. The agreement is subject to customary closing conditions and is expected to close by the end of March 2008 . Cieffe's founder and CEO, Fabrizio Colciago, will continue as Managing Director and lead the ongoing evolution and growth of the Cieffe product line within the Europe , Middle East and Africa (EMEA) region.
"This is a strategic acquisition for March Networks that significantly strengthens our presence in the EMEA region as well as in the high-growth commercial industrial segment," said Peter Strom , President and CEO, March Networks. "Cieffe's innovative product portfolio complements March Networks' existing solutions and enhances our position as a global supplier of comprehensive, open IP video management solutions."
About March Networks
March Networks(TM) (TSX:MN; AIM:MNW) is a leading provider of intelligent IP video and business analysis applications that enable organizations to reduce losses, mitigate risks and improve security and operational efficiency. The Company's advanced software suite includes enterprise-class video management, powerful analytics and comprehensive managed and professional services. Our software and systems are used by leading financial institutions, retailers, transportation authorities and other organizations in more than 50 countries. For more information, please visit www.marchnetworks.com.
This release contains certain forward-looking information or statements, including expectations of future business. These statements are not historical facts but reflect the Company's current expectations and assumptions regarding future results or events. The assumptions and expectations are subject to a variety of risks and uncertainties that are difficult to predict, that may be beyond March Networks' control, and that may cause actual results or events to differ materially from those expressed in the forward-looking statements. The expectations, assumptions and risks made in the preparation of or relating to the forward-looking information and statements include, but are not limited to, certain assumptions of future business following the consummation of the acquisition, March Networks' ability to achieve the expected synergies as a result of the acquisition, the strengthening of March Networks' position in the EMEA and commercial industrial markets as a result of the acquisition and the expected timing of the closing of the acquisition by the end of March, 2008. Actual results could differ materially from those expressed in any forward-looking statements due to risk factors such as (1) the integration of the Cieffe business and employees into March Networks and the achievement of expected synergies, (2) the ability of March Networks' to retain key employees of the acquired business, (3) the ability of March Networks' to compete successfully in a highly competitive and rapidly changing IP video surveillance market, and (4) the accuracy of the Company's forecasting of acquisition-related restructuring costs, allocation of the purchase price to intellectual property, goodwill and other acquisition related inventory, and other asset adjustments. These and other risks and factors are identified in March Networks' public filings with regulatory authorities in Canada . March Networks assumes no obligation to update these forward-looking statements as a result of new information or future events.
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