ZMAX Announces Acquisition of Parker Management Consultants, Ltd.;
Acquisition to Enhance ERP Capabilities, Expand Customer Base and Add Texas Branch
GERMANTOWN, Md., Sep 30, 1999 (BUSINESS WIRE) -- ZMAX Corporation (NASDAQ:ZMAX) today announced that it will acquire Parker Management Consultants, Ltd. ("PMC"), a privately held information technology consulting firm based in Laurel, Maryland.
Founded in 1990, PMC provides Enterprise Resource Planning (ERP) and specializes in Oracle applications. With offices in Laurel, Maryland and Houston, Texas, PMC employs approximately 30 consultants and will generate approximately $5 million in revenues in 1999. The acquisition will be completed on October 1, 1999.
Michael C. Higgins, president and chief executive officer of ZMAX, states, "One of our goals for the year was to complete one to two acquisitions in the $5- to $15-million range, and PMC is a strong addition to our Company. We believe that ZMAX can leverage PMC's skill sets and customer base and dramatically grow the combined company's
service offerings."
PMC provides ERP consulting and implementation services to mid-market manufacturers and distributors, having completed more than 200 successful project implementations. As an Oracle Service Provider, PMC
offers Oracle applications and database administration, as well as a range of consulting and training services.
The purchase price includes a cash payment of $1,350,000, an escrow of $150,000, a three-year note in the principal amount of $3 million bearing interest at 6.0% per annum and a warrant to purchase 200,000 shares of ZMAX Common Stock at an exercise price of $5.00 per share.
PMC will contribute approximately $800,000 in working capital and $3 million in backlog to ZMAX.
According to James T. McCubbin, vice president and chief financial officer of ZMAX, "We have a number of strict criteria for our acquisitions, and PMC has met all our expectations. It has generated a high internal growth rate, and its gross profit margins are high. The acquisition will be immediately accretive to earnings, and we expect further savings as PMC's Maryland operation is merged into ZMAX's headquarters in Germantown, Maryland."
PMC has built a strong reputation in the manufacturing arena for cost-effective application systems, and it is a dominant player in Oracle applications. PMC announced in July that it had completed the world's first full-blown ERP implementation of the Oracle Application products using the Oracle FastForward(TM) High Tech methodology at
Corvis Corporation based in Columbia, Maryland.
The system was operational in only 65 days as compared to the industry standard of 90 days.
Concludes Higgins: "As we recently announced, our new investment bankers, Pennsylvania Merchant Group, will enable us to expand our ability to screen an even larger number of highly qualified IT acquisition candidates and accelerate our acquisition program. Our goal is to build a focused leading edge IT consulting company offering
proprietary value-added methodologies and services."
Headquartered in Germantown, Maryland, ZMAX Corporation is an information technology consulting firm. The Company's IT services include e-business services, enterprise resource planning, consulting and implementation, client server development, and Year 2000 software and services.
Statements made in this press release that are not historical or current facts are "forward looking statements" made pursuant to the safe harbor provisions of federal securities laws.
Forward looking statements represent management's best judgment as to what may occur in the future, but are subject to certain risks and uncertainties that could cause actual results and events to differ materially from those presently anticipated or projected.
These factors and others are discussed in the "Management Discussion and Analysis" section of ZMAX's Annual Report on Form 10-K for the fiscal year ended December 31, 1998, to which reference should be made.
ZMAX CORPORATION is quoted on the NASDAQ Small Cap exchange under the symbol of "ZMAX" and on the Frankfurt and Berlin Stock Exchanges under the symbol of "ZMX".
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