Architel to acquire Accugraph
Accugraph Corporation ACU.A
Shares issued 19,400,000 Apr 9 close $0.90
Mon 13 Apr 98 News Release
See Architel Systems Corp (ASY) News Release
Mr Tony van Marken and Mr Paul Damp report
Architel Systems and Accugraph have entered into an agreement under which
Architel will acquire all of the outstanding shares of Accugraph. Under the
agreement, Accugraph will amalgamate with a wholly owned subsidiary of
Architel and each Accugraph class A share will be exchanged for 0.0833 of a
common share of Architel. The transaction is valued at approximately C$37
million, based on the closing price of Architel's shares on Thursday April
9 1998 of C$15.00. As a result of the transaction, Accugraph will become a
wholly owned subsidiary of Architel. The transaction is expected to be
completed by late June 1998.
"The acquisition of Accugraph is a major component of our strategy to be
the pre-eminent supplier of operations support systems to
telecommunications service providers worldwide," said Tony van Marken,
president and CEO of Architel. "Our two companies provide complementary
best-in-class provisioning solutions. By combining our two product lines,
we will become the first independent software vendor to provide a complete
suite of provisioning products, that includes order management, network
creation, inventory management, design and assignment, service activation
and interconnection gateway. The combined offering of these products will
allow us to provide one stop shopping and address the total provisioning
needs of telecommunications service providers of all sizes. We believe this
will provide us with a significant competitive advantage in the service
provisioning market, which is estimated by independent analysts to grow
from US$3.8 billion in 1998 to US$5.6 billion in 2002."
"Accugraph and Architel are a perfect fit for each other," said Paul Damp,
chairman and CEO of Accugraph. "We are delighted to be combining our
resources with such a dynamic and solid organization as Architel. Over the
last year, Accugraph has taken significant strides in focusing our effort
on the OSS market. Starting with the acquisition of Objectel in early 1997,
Accugraph has re-established itself as a leader in network inventory and
provisioning products and services. We have already begun working with
Architel on a collaborative basis on a number of projects. Bringing our two
companies together will allow us to provide not just best-in-class products
to our customers but the best-in-suite service provisioning solution sought
by telecommunications service providers today, who desire to minimize the
number of vendors and integration projects to be managed."
The combination of Architel and Accugraph will build upon the respective
strengths of the two companies in developing and supporting proven,
best-in-class products; Architel's strength being in the fields of
automated service activation and interface development and Accugraph's
strength being in the fields of planning and engineering and network
inventory and provisioning. Architel's flagship product, Automatic Service
Activation Program (ASAP), is a flexible, scaleable platform that supports
automated flow-through service activation of convergent service offerings
of telecommunications service providers. Accugraph's Objectel product is a
proven network creation, inventory and design and assignment solution,
using new technology. Accugraph has also commenced delivery of its new
order management system, which incorporates the telecommunications service
provider's business rules and logic to effectively manage a fully automated
provisioning process. An important part of order management is a gateway
for OSS interconnection, a critical need among carriers created by telecom
reform. Recent development work by Architel in this product area will
complement the work already achieved by Accugraph.
Upon completion of the transaction, Paul Damp, chairman and CEO of
Accugraph will become chairman of the board of directors of Architel and
Tony van Marken will continue as president and CEO.
The transaction will be effected under the arrangement provisions of
applicable corporate legislation. The transaction is subject to a number of
conditions, including the approval of the shareholders of Accugraph, the
receipt of all necessary regulatory approvals and final court approval. The
transaction is expected to be tax-deferred to Accugraph shareholders and
will likely be accounted for on a purchase accounting basis under both
Canadian and US generally accepted accounting principles. Under the
agreement, Accugraph has agreed not to solicit other offers and to pay to
Architel a fee equal to $1,500,000 plus expenses not to exceed $400,000 if
the transaction is not completed due to a competing offer.
WARNING: The company relies on litigation protection for "forward-looking"
statements.
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