GDIS merger with SRGE...going to Nasdaq or the American exchange...Wednesday October 13, 7:55 am Eastern Time
Company Press Release
Global Datatel and Surge Components Sign Merger Agreement
DELRAY BEACH, Fla. and DEER PARK, N.Y.--(BUSINESS WIRE)--Oct. 13, 1999--Global Datatel, Inc. (OTCBB:GDIS - news) and Surge Components, Inc. (NASDAQ:SRGE - news) jointly announced today that Global Datatel and Surge Components have signed a definitive agreement to merge the two companies (see terms listed below) subject to shareholder approval and due diligence.
Upon completion of the merger, Surge Components shall operate as a wholly owned subsidiary of the Parent Corporation, Global Datatel, Inc. Richard Baker, president and CEO of Global Datatel, Inc. and Ira Levy, president of Surge Components, Inc, together made the announcement. Equilink, LLC acted as the investment banker on the merger.
Global Datatel, Inc. (www.globaldatatel.com) is a leader in Latin America in medium to large system integration projects. Global Datatel is a First Tier IBM Business Partner, Microsoft Solution provider, Lotus Premier Team Provider and a distributor for JBA International E.R.P. Company. Global also distributes hardware for Compaq, Dell, Hewlett-Packard and Cisco Systems.
''Global Datatel's system integration business has grown tremendously. I have seen the growth of Global, reviewed their plans for enormous growth ahead; and believe Latin America offers tremendous profit potential for those companies positioned to capture this market. My board and I believe in Global's plan and were impressed with their track record of growth and profitability. Naturally, we see that Global can, through its many business partners and clients, complement and expand our current business,'' said Ira Levy. He further stated, ''that while the rapid growth together with profits of Global impressed Surge, Global offers our shareholders much in addition to this exciting and solid systems integration business. This merger with Global Datatel, Inc. brings with it, eHOLA.com, a leading Internet Service Portal. Our board is very proud to present this opportunity to our shareholders.''
eHOLA.com, a wholly owned subsidiary of Global Datatel, Inc., is an Internet Service/Content Provider specializing in the Latin American marketplace. As previously announced on August 11, 1999, eHOLA.com signed a collaboration agreement with IBM whereby eHOLA.com, effective Oct. 1, 1999, is pre-loaded in all of IBM Aptivas shipped to Latin America.
The multilingual portal recently unveiled its new Web page (www.ehola.com) which features 18 different categories of information in both Spanish and Portuguese. Twelve category anchors include IBM, Wall Street Journal, Interactivo, eduverse, Latino TV, elBUZZ, VCOM.com, AutoWorld, Arte Realidad, WWF (World Wrestling Federation), LatinMD.com and EFE News Agency.
eHola provides a central starting point for finding a variety of information on the Internet. In addition to eHOLA.com, the subsidiary's properties include eTiendas.com, an online shopping channel, and eSubasta.com, the multilingual auction site.
eHOLA.com offers integrated Internet access in English, Spanish and Portuguese to individuals and businesses in North, Central and South America.
eHOLA.com Online Service Network (www.ehola.com) provides individual and corporate dial-up and dedicated Internet access in over 350 cities throughout Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, El Salvador, Guatemala, Mexico, Paraguay, Peru, United States,Uraguay, and Venezuela.
Richard Baker, stated that ''in addition to having an attractive balance sheet, Surge provides Global with unique resources that will assist us in marketing eHOLA.com in the U.S. Surge offers us a sourcing advantage for high quality, low cost Internet appliances, such as set-top boxes, and personal computers. Fourth quarter plans include rolling out a National marketing campaign in the U.S. for a free personal computer or Internet Set Top Box, which will include eHOLA's Internet access and multi-lingual portal services. The initial campaign is targeted at the estimated 10 million Latin American households in the United States.. Global, in order to capture the Latin U.S. market, needs to maintain its integrity of a ''Latin'' portal; and still be prepared to offer what has become the industry norm of today by offering free computers or set-top boxes, bundled with the Internet access services for a low monthly payment.''
Mr. Baker further added that although Global's primary focus will remain on Latin America for both Global's systems integration and eHOLA businesses, ''Surge arms us with an infrastructure to target the very appealing U.S. Latin market.'' Surge's current executives, including Ira Levy and Steve Lubman, shall continue to head the U. S. subsidiary.
Surge Components, Inc. is a supplier of high quality electronic components. Its product mix includes a large selection of high-performance discrete semiconductors, capacitors and discrete components. Its factories are ISO 9000 quality certified. Surge sells directly to manufacturers of such products as computer modems, video boards, power supplies, audio and many others.
Surge announced its revenues for the third quarter ended August 31, 1999 net sales were $3,341,149 which reflected a 60% increase over the same period last year. Its net income for the third quarter ending August 31, 1999 was $143,263 compared with a loss of $100,912 for the same period last year.
Terms of the Merger
Terms
Upon the closing of the merger, shares and warrants of Surge Components, which currently trade under the symbols SRGE and SRGEW, respectively, shall be exchanged for shares and warrants of Global Datatel, Inc. The common share exchange ratio shall be one common share (1) of Global Datatel for two (2) common shares of Surge Components, Inc.
The Surge common stock purchase warrants shall become Global Datatel warrants with the same exercise price and same expiration date. These warrants shall exchange on a one (1) for one (1) basis. Global Datatel, Inc. anticipates moving its listing to either the American Stock Exchange, or Nasdaq Stock Market.
This press release contains forward-looking statements regarding Surge's and Global's business strategies and future plans of operations. Forward-looking statements involve known and unknown risks and uncertainties.
The Companies' risks and uncertainties include, their ability to complete the merger, the merged entity's ability to combine and work together and grow the companies, periodic downturns in their industries, dependence on the Internet, timely acceptance of new products and intense price competition in their industries.
These and other important factors, including those mentioned in various filings with the Securities and Exchange Commission made periodically by the Companies (available at www.sec.gov.), may cause the actual results and performance to differ materially from the future results expressed in or implied by such forward-looking statements.
The forward-looking statements contained in this press release speak only as of the date hereof and the Companies disclaim any obligation to provide public updates, revisions or amendments to any forward-looking statements made herein to reflect changes in the Companies' expectations or future events.
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