To the Copenhagen Stock Exchange
and the press
Copenhagen Stock Exchange Message 26/2000
September 28, 2000
i-data in negotiations to acquire Canadian Eicon
i-data international a-s (”i-data”) is in negotiations to acquire Eicon Technology Corporation (”Eicon”). Eicon is a Canada-based company which produces and markets Internet Access Products. Eicon is a publicly traded company on the Toronto Stock Exchange under the ticker code “EIC”. Negotiations are taking place between Eicon’s two major shareholders and i-data. The parties expect to make an announcement regarding the transaction within 10 days.
As a natural step in i-data’s growth strategy for its ”Secure Internet Connectivity” business area, marketed under the LASAT Networks brand, i-data has identified an immediate opportunity to strengthen its international profile significantly by acquiring Eicon. After the acquisition of Eicon, i-data will continue to have two primary business areas: Secure Internet Connectivity and Workflow & Output Management.
Upon completion of the acquisition, i-data will become one of the world’s leading vendors of Secure Internet Connectivity Solutions, and i-data will become suppliers to some of the largest Telecommunications Companies (telcos), Internet Service Providers (ISPs) and Original Equipment Manufacturers (OEMs) worldwide.
A central part of the sales strategy for i-data’s Secure Internet Connectivity business area is to bundle and market high-end products such as ISDN, ADSL, VPN routers and Application Servers in partnership with telcos and ISPs. The new global sales network which i-data will have access to with the acquisition via Eicon’s strong market position is expected to have a positive impact on the growth in sales of these products.
Combining i-data’s activities within Secure Internet Connectivity (LASAT) and Eicon’s activities will make i-data one of the world’s leading ISDN supplier and will give the company a significant market position within ADSL and VPN routers. The total product portfolio will add both scope and depth in i-data’s product offerings within all the product segments. Since the companies previously have only competed directly on a few product segments and markets, there is only little overlap, and as such, great opportunity to make use of existing sales channels for sales of new products. As such, i-data will become a “one stop shop” for telcos and ISPs within solutions for home offices and corporations.
By combining the two development teams from i-data and Eicon, i-data will gain significant development synergies, including benefits from both companies’ strong competence within Linux-based development. Most importantly, the combined development competence enable faster launches of new, technologically leading products. Also, there are a number of areas where development resources can be freed up and transferred to other projects.
Aside from the sales- and product-related advantages of acquiring Eicon, i-data will be able to realize a number of operational synergies. Important synergies are economies of scale within purchasing and logistics.
"We hope to be able to complete the acquisition of Eicon within a short period of time, and with it make i-data a world leading company within Secure Internet Connectivity. With this acquisition, we will have taken another step in completing the goals we set for i-data at the time of our initial public offering, just under a year ago," says Nick Jensen, President & CEO of i-data international a-s.
Eicon
For the financial year ended June 30, 2000, Eicon recorded revenue of approximately DKK 1 billion. Eicon was established in 1984, and today has approximately 550 employees and sales offices worldwide.
Eicon produces and markets products for Internet access within some of the same segments as i-data. Additionally, Eicon has a number of products for network communications via the Internet (Wide Area Networking) and Voice over IP, facilitating telephony via the Internet.
Eicon has recently revised its strategy due to significant financial losses. Eicon’s new strategy has meant refocusing on the core segments of Internet Access (ISDN and ADSL) and Media Gateways (for Unified Messaging and Voice over IP), in order to facilitate revenue growth, increased profitability, shorter time to market, and market-driven development.
For more information about Eicon, please see the company’s web page at www.eicon.com.
The Transaction
i-data expects to make a cash offer for the Eicon shares. The price for Eicon’s shares will be CAD 5 per share, equalling a total offering price of approximately DKK 1 billion. The acquisition of Eicon will be conditional upon i-data achieving at least 2/3 of Eicon’s share capital (fully diluted), regulatory approvals, and certain other conditions.
i-data is currently examining the possibility of conducting a private placement of new shares in connection with the expected acquisition. The capital increase is planned to be targeted at a limited number of Danish and international investors by making use of the authorization to issue up to 640,000 new shares of nominal value DKK 10 at market value, in accordance with the companys by-laws, which equals appr. 10% of the total share capital. Should the acquisition of Eicon not be concluded as expected, the potential proceeds from a capital increase will become part of i-data's financial reserves for future acquisitions.
For questions concerning this release, please contact:
Investor contact:
Nick Jensen, CEO, tel.: (+45) 44 36 61 00
Karsten Dyhrberg Nielsen, Sr. VP, Investor Relations, tel.: (+45) 44 36 61 03
Media contact:
Jakob Faarvang, Public Relations Manager, tel.: (+45) 44 36 62 05
About i-data international a-s
Headquartered in a suburb of Copenhagen, Denmark, i-data international a-s (i-data) is an international IT company comprised of two business areas:
Secure Internet Connectivity: One of Europe's leading vendors of Internet connectivity and security products, with an emerging presence worldwide. Marketed under the LASAT Networks brand.
Workflow & Output Management: A market and technology leader in the workflow & output management market, with distribution worldwide. Marketed under the i-data Printing Systems, GammaGraphX (GGX) and MPI brands.
i-data international has an installed base of several million units, and currently has approximately 350 employees worldwide. i-data international is a publicly traded company on the Copenhagen Stock Exchange. More information is available on the world wide web at www.i-datac.com
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