It's full steam ahead for Plaintree Systems
This article is from the Ottawa Citizen High Tech Report yesterday. Very encouraging especially on the comment that demand exceeds supply for the private placement.
PJD22
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Ottawa Citizen High Tech Report - March 20, 2000
It's full steam ahead for Plaintree Systems.
By: Karyn Standen
If Dave Watson is looking confident these days, he has reason to be. Seven months ago, in an 11th hour bid to save his technology components firm, Targa Group Inc., he merged the struggling Stittsville network switch manufacturer with Plaintree Systems Inc.
Mr. Watson became president and chief executive of the merged firm, witch kept the Plaintree name.
Fast forward to the present. Plaintree, which never once reported an annual profit in its 11 years before the merger, now has investors buzzing over its proposed multi-million-dollar private placement.
What's more, with last week's acquisition of an Ottawa wireless networking company -- it's first since it's near collapse -- Plaintree is making inroads into niche markets that are "far in excess of what we could ever supply," Mr. Watson said.
Plaintree is moving quickly to rebuild its product distribution systems and expand into the hot wireless market.
To that end, the company has hired Taurus Capital Markets Ltd. to help it raise up to $10 Million through a proposed issue of special warrants.
Mr. Watson is on a three-day road trip to Toronto this week to drum up support among institutional investors, but already it appears that Plaintree is attracting interest.
"Taurus has indicated that the demand (for the special warrants) exceeds supply," he said adding that no decision has been made to increase the offering.
On the Toronto Stock Exchange (LAN/TSE), Plaintree's share value is up 400 per cent since the beginning of the year. It closed on Friday at $2.31.
Coupled with the $1.2 million Plaintree has in the bank, the private placement will create a war chest large enough to fuel additional acquisitions and give the firm added flexibility.
While nothing is in the works, Plaintree is looking to"?boost itself with a company that has a good knowledge of distribution," Mr. Watson said.
Plaintree's most recent acquisition, that of a wireless networking firm A.T. Schindler Communications Inc., gives it access to infrared communications systems. That means Plaintree can move into the wireless market without having to provide extensive transmission infrastructure.
Infrared LED signals can send data at 10 Mbps between points as far as 1.5 kilometers apart, while laser can transmit information at a rate of 100 Mbps to a destination five kilometers away, Mr. Watson says.
Plaintree intends to use its wireless technology to round out its existing telecommunications networking product offering, and move quickly into key markets: the military, the printing industry, hospitals and schools.
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