Q-Media Closes Acquisition of Quebecor World Software
Manufacturing Facilities; Revises Terms of Acquisition and
Strategic Alliance
Vancouver, British Columbia - Thursday, August 3, 2000, 8:30 AM EDT
Q-Media Services Corporation (TSE:QMS) today announced that it
has closed the previously announced acquisition of Quebecor
World's two US software manufacturing and fulfillment facilities
under revised terms. In addition to revising the payment
structure, the companies have strengthened their strategic
alliance and extended it to four years.
The price of the acquisition remains $93 million (US$63 million),
which will now be paid $62 million (US$42 million) in cash at
closing. Quebecor World will participate in the balance of the
financing by way of $7 million (US$5 million) in special warrants
and a $24 million (US$16 million) promissory note which will be
converted into redeemable preferred shares upon shareholder
approval. The redeemable, convertible preferred shares will have
a term of 12 months with an option by Q-Media to extend an
additional six months and will carry a coupon of 6% payable at
the earlier of redemption or upon expiry of the term. Should the
preferred shares not be redeemed at the end of the term, they can
be converted to common stock at a price of $2.35 per share. The
special warrants are convertible into common shares at the higher
of $2.60 per share or at the price of a subsequent public
offering.
In addition, the strategic alliance, whereby Q-Media will
continue to perform software manufacturing, printing, assembly
and fulfillment for Quebecor World, has been extended to four
years and $45 million (US$30 million) in revenue.
Robert M. Lawrie, Q-Media President, said he was pleased with the
revised terms and especially with Quebecor World's strong
endorsement of the transaction as indicated by its equity
participation. "The current financial market conditions made it
desirable for both companies to cooperate in an effort to find
new solutions that would satisfy both of our objectives going
forward," Mr. Lawrie said. "These new terms allow Q-Media to
maintain its solid balance sheet while significantly expanding
its business."
The acquisition is expected to more than double Q-Media's annual
revenues to above $200 million (US$140 million) and increase
EBITDA and net earnings similarly. It brings new blue-chip
customers to Q-Media, while strengthening the Company's market
position. The facilities, located near Seattle, Washington and
Boston, Massachusetts, offer mastering and replication of
CD-ROM's, assembly of final retail and OEM packages, printing of
technical documentation, and order fulfillment. In addition, the
acquisition will significantly enhance Q-Media's capabilities in
internet-based business processes, particularly web-based
fulfillment. The acquisition has Microsoft Authorized Replicator
and Fulfillment Center designations and is ISO 9002 certified.
Q-Media Services Corporation operates seven supply chain
management facilities located in Vancouver, Canada; Redmond,
Washington; Fife, Washington; Irvine, California; Austin, Texas;
Nashville, Tennessee; and Westborough, Massachusetts. These
facilities provide complete outsourced supply chain management
services to technology customers, such as hardware manufacturers
in the personal computer industry, content publishers, and
software publishers. The Company's services include planning and
procurement of materials, production and assembly services, and
fulfillment and inventory management. Shares of Q-Media Services
Corporation are traded on the Toronto Stock Exchange under the
symbol (QMS). U.S. S.E.C. exemption: 12g3-2(b) 82-3761. Further
information can be found at the web site: www.qmedia.ca.
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FOR FURTHER INFORMATION PLEASE CONTACT:
Jon W. Kieran, Investor Relations (416) 868-1079 |
