Hi Len & Mike!
Here is the release that came through E-mail today. The company made reference to it coming out today in one of the documents filed through SEDAR.
In my opinion, the reference to the Web Based ERP provides an explosive potential for the company. It provides them with an enormous opportunity. This is big folks, really big! (Check the bolded sections)
Here is the text of the release. By the way, I have cleared my schedule in order to participate in Thursday's Investor Forum.
Crazy Canuck
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Net Shepherd details enhanced business transactions
Net Shepherd Inc. - WEB
Tue 22 Feb 2000
News Release
Mr. Don Sandford reports Net Shepherd has mailed to its shareholders a notice of special meeting and information circular, giving details of the enhanced business transactions with ClickChoice.com Inc. and Vanenburg Group BV. The shareholders meeting will be held on March 21.
The enhanced business transactions are: a share exchange agreement concerning the purchase of ClickChoice.com Inc.;
a software development agreement with Vanenburg, giving Net Shepherd access to Vanenburg's software development resources in India; a technology cross-licensing agreement with Vanenburg, giving Net Shepherd access to the technology of Vanenburg and its affiliates (this will enable new applications for the use of Net Shepherd's technology, creating new revenue opportunities in areas such as Web-based ERP); and a $9-million private placement by Vanenburg into Net Shepherd at $3 per share.
The share exchange agreement will enable Net Shepherd to acquire all of the shares and options of ClickChoice.com Inc. in exchange for issuing 27,819,901 common shares of Net Shepherd. Options to acquire common shares, as part of to Net Shepherd's incentive stock plan will also be issued. Each ClickChoice common share or option will be exchanged for approximately 2.23 Net Shepherd shares and options. This ratio has been arrived at through negotiation and with reference to an independent valuation of the companies prepared by Yorkton Securities Inc.
The software development agreement with Vanenburg will enable Net Shepherd to obtain software development services in India valued at $11.25-million in exchange for issuing 2.5 million common shares. The technology cross-licensing agreement with the Vanenburg Group of companies will give Net Shepherd access to the technology of Vanenburg and its affiliates. This will enable new applications for the use of Net Shepherd's technology, creating new revenue opportunities. One such opportunity will be the next generation of enterprise resource planning (ERP) software. Current ERP programs deal with an enterprise's structured information, such as customer orders. The next generation will be Web-based and will additionally capture the unstructured information now available on the Web.
Vanenburg has agreed to make a $9-million private placement into Net Shepherd at a subscription price of $3 per share. In connection with the enhanced business transactions, Vanenburg has loaned $7.5-million to Net Shepherd. If the enhanced business transactions are completed, these loans will be automatically converted into common shares on the basis of one common share per $3 principal amount of loan. If the enhanced business transactions are not completed, these loans are automatically converted into first preferred shares of Net Shepherd on the same $3 per share. In addition, Vanenburg has committed to make available to Net Shepherd, to finance the implementation of Net Shepherd's business plan, a backup credit facility during the 2000 fiscal year to a maximum of $10-million (U.S.).
The enhanced business transactions constitute a related party transaction under Ontario Securities Commission Policy 9.1. Accordingly, the enhanced business transactions must be approved by a majority of votes cast at the meeting other than votes cast by Vanenburg. A material change report has been prepared by Net Shepherd and filed with securities regulators containing the following information: a description of the transaction and the reasons for it; the effect of the transaction on Net Shepherd's business; the relevant history of the subject matter of the transaction; the effect of the transaction on interested parties; the review and approval process for the transaction; and a summary of any valuation in respect of the transaction.
Copies of the material change report are available to shareholders free of charge from Net Shepherd. The board of Net Shepherd established a special committee of independent directors to review the enhanced business transactions and to report to the board on whether these transactions are in the best interests of Net Shepherd and fair to the minority shareholders of Net Shepherd. The special committee retained Yorkton Securities Inc. as its independent financial adviser in connection with the enhanced business transactions. The special committee unanimously concluded that the enhanced business transactions are fair to minority shareholders of Net Shepherd and are in the best interests of Net Shepherd, and unanimously recommended that the board of directors approve the enhanced business transactions. The conclusions reached by the special committee were based upon the following factors: the close synergies between the businesses and technologies of ClickChoice and Net Shepherd and the anticipated benefits of consolidating these technologies under one corporate structure (which will eliminate any restrictions on use); the improved speed of bringing Net Shepherd's products to market that should result from access to software development resources in India and the use of Vanenburg's sophisticated development methodology; the increased access to capital that can be used to meet the go-to-market financing needs of Net Shepherd's U.S.-based applications companies; the new revenue opportunities that should result from the cross-licensing agreement with the Vanenburg group of companies; the software development agreement is payable in shares (which helps conserve cash within Net Shepherd) and has an estimated value of between $12-million to $15-million because of lower pricing in India; Yorkton's valuation of ClickChoice and Net Shepherd; Yorkton's fairness opinion; the opportunities for increased organizational effectiveness in such areas as software development project management and marketing; the benefits of combining the consumer and business intelligence operations in Atlanta and Net Shepherd's access to ClickChoice's experienced marketing, business development and project personnel; the benefits of an increased U.S. presence through business operations in high-tech regions; the anticipated benefits of being associated with Jan Baan and the Vanenburg Group of companies, which should enhance Net Shepherd's ability to raise new capital and to forge new relationships with tier one financiers and a wide range of business and technology partners; the creation of a more diverse management team; and the enhanced business transactions are subject to the approval of the majority of the minority shareholders of Net Shepherd.
Recommendation of the board of directors
The board of directors unanimously adopted the special committee's report and recommendation and unanimously recommends that the shareholders of Net Shepherd vote in favour of the enhanced business transactions.
There will be a Net Shepherd investor forum with Don Sandford, president and chief executive officer of Net Shepherd at 2.30 p.m., MT, on Thursday, Feb. 24.
Shareholders and others will be able to discuss the information circular and other matters.
ClickChoice is a private Internet information company with headquarters in Atlanta, Ga. Vanenburg Group BV, a venture capital firm based in the Netherlands, is the majority shareholder (82 per cent) of ClickChoice and a holder of approximately 10 per cent of the shares of Net Shepherd. |
