Zitel Corporation to Acquire Balance of MatriDigm Corporation
FREMONT, Calif., Aug. 10 /PRNewswire/ -- Zitel Corporation (Nasdaq: ZITL) announced today that it has entered into an agreement with MatriDigm Corporation whereby it will acquire the outstanding shares of MatriDigm not owned by Zitel through a merger of MatriDigm with a wholly-owned subsidiary of Zitel. Zitel will issue approximately 2,200,000 shares of its common stock upon closing of the merger. The closing of the transaction, which will be accounted for as a purchase, is expected to occur in approximately 60 days and is subject to regulatory approval and other conditions.
It is contemplated that MatriDigm will operate as a separate business unit of Zitel, alongside Zitel's Datametrics business unit. Richard W. Ormond will serve as President of the MatriDigm business unit and Henry C. Harris will continue as President of the Datametrics business unit. MatriDigm's principal operations are being relocated to Zitel's headquarters in Fremont, Calif.
MatriDigm was formed in 1995 to provide maintenance services for users of legacy Cobol code utilized on mainframe computer systems. Its initial focus, remediation of code for Year 2000 compliance, has not generated significant revenue and it is currently focused on independent verification and validation of code remediated by others and licensing its code for clean management and quality assurance for on-going maintenance. Zitel owns approximately 31% of the outstanding stock of MatriDigm on a fully-converted basis. In the nine-month period ended June 30, 1999, MatriDigm had net sales of $3.7 million and a net loss of $6.1 million. MatriDigm currently projects additional working capital needs at least through the end of calendar 1999.
Mr. Jack H. King, who officially retired as President and CEO of Zitel Corporation at the end of July, said, "As my last announcement for the Company, I am pleased to announce that we have successfully concluded a transaction which has been planned for a long period of time. Both MatriDigm and Datametrics have technology that provide opportunities for offering unique solutions and growth; both separately and synergistically. I have worked with Rich Ormond, Hank Harris, Asa Lanum, Zitel's new CEO, and Anna McCann, the new CFO, and I believe the shareholders will be pleased with the quality of the business team that will lead the Company into the future."
Mr. Lanum said, "The acquisition of MatriDigm adds important products, services and technologies that will allow Zitel to extend its capability to provide its customers the ability to manage and maintain their key business systems."
Mr. Ormond commented, "Zitel has been a business partner since their initial investment in MatriDigm. This merger comes at a time when MatriDigm's focus is on the Y2K remediation and Independent Verification and Validation business as well as the emergence of our non-Y2K business built upon our strong software technology. We believe we are poised to address new markets and Zitel's continued investment and relationships will certainly strengthen our foundation and aid us in these efforts."
This press release contains projections and other forward-looking statements regarding future events or the future financial performance. These statements are only predictions and actual events or results may differ materially. Refer to the documents Zitel Corporation files from time to time with the Securities and Exchange Commission. These documents contain and identify important factors that could cause the actual results to differ materially from those contained in the projections or forward-looking statements in this press release.
About Zitel Corporation:
Zitel Corporation is an information technology company. Its Datametrics subsidiary specializes in automated performance analysis and correlation software. Its Year 2000 services business includes consulting, project management, planning, analysis, code conversion, code audit and testing. Zitel's headquarters are located at 47211 Bayside Parkway, Fremont, CA 94538. Telephone: 510-440-9600 or 800-622-5020. FAX: 510-440-9696. For information on Year 2000 services, call 888-FIND-FIX. Visit Zitel's Web site at www.zitel.com for information and instructions to receive press releases via e-mail.
About MatriDigm Corporation:
MatriDigm is a software technology company specializing in technologies and services that improve the understanding, maintenance, migration, modification and testing of software applications. MatriDigm currently offers products and services addressing Year 2000 IBM COBOL code renovation and Independent Verification and Validation (IV&V). MatriDigm has received ITAA *2000 certification of its products and services. Visit MatriDigm's Web site at www.matridigmusa.com.
NOTE: Zitel is a registered trademark of Zitel Corporation. Datametrics is a registered trademark of Datametrics Systems Corporation. MatriDigm is a registered trademark of MatriDigm, Inc. All other product names and brand names are trademarks or registered trademarks of their respective holders.
SOURCE Zitel Corporation
CO: Zitel Corporation; MatriDigm Corporation
ST: California
IN: MLM CPR
SU: TNM
08/10/99 08:00 EDT prnewswire.com |
