Virtual Technology(VTCO) Signs Definitive Agreement to Acquire the Operating Assets of Tech Squared Inc.
Tuesday November 9, 9:51 am Eastern Time
Company Press Release
MINNEAPOLIS--(BUSINESS WIRE)--Nov. 9, 1999--Virtual Technology Corporation (OTCBB:VTCO - news), a rapidly expanding global e-commerce company specializing in computer hardware, software, consumer electronics and related services, today announced it has signed a definitive agreement to acquire substantially all of the operating assets of Tech Squared Inc. (OTCBB: TSQD - news) for a purchase price of approximately $3.0 million, subject to certain adjustments. Tech Squared, based in Minneapolis, is a national marketer and distributor of mid- to high-end microcomputer hardware, software and peripherals primarily to businesses in the desktop publishing, graphic arts and pre-press industries, as well as an emerging customer base of internet and intranet site developers. Tech Squared's 1998 operating revenues were $38.8 million.
The asset sale to VTC includes Tech Squared's Net Direct, DTP Direct and distribution operations together with various trade and Internet domain names, including netdirect.com, dtpdirect.com and tech2.com. In connection with the purchase, VTC plans to expand and leverage Tech Squared's manufacturer relationships with Apple Computer, Inc. and other major suppliers. VTC believes that Tech Squared's manufacturer relationships, together with VTC's existing arrangements with IBM, Hitachi, Hewlett Packard, Sony and other hardware and software manufacturers, will greatly enhance each customer's shopping experience and satisfaction.
VTC believes it will generate significant growth through access to the 138,000 business customers in Tech Squared's catalog and telemarketing databases. VTC intends to maximize these relationships by leveraging its e-commerce model and supplying 24-hour Web site service. In turn, VTC believes that Tech Squared's business-to-business telemarketing group will help expand VTC relationships with its existing small business customers.
Commenting on the acquisition, Greg Appelhof, VTC's President and Chief Executive Officer, said, ''This investment cements the strong fit of Tech Squared's business with both VTC's online retail store (www.virtual-world.com) and product distribution operation. We think this acquisition is an extremely cost efficient way for us to grow infrastructure and acquire a very valuable customer base. The addition of Tech Squared's inbound and outbound telemarketing group with VTC's existing sales staff will allow VTC to grow its higher-margin business-to-business customer base and related sales.''
Appelhof noted that closing on the acquisition is subject to various conditions, including shareholder approval of Tech Squared's shareholders and receipt of financing by VTC.
ABOUT VIRTUAL TECHNOLOGY CORPORATION
Virtual Technology Corp. (VTC) is an e-commerce company specializing in the sale of high-performance computer hardware, software and peripheral products to sophisticated computer users. The Company provides end-to-end e-commerce solutions through four primary business units: an ''e-tail'' Web site located at www.virtual-world.com offers more than 60,000 choices of brand name computer products and over 100,000 software titles; Graphics Technologies Inc. (www.graphicstech.com) a 12 year old wholesaler and distributor of high-end computers and graphic products with seven regional offices and 1998 net sales of $65 million; Techmart, a provider of private label community shopping Web sites as well as the required inventory, fulfillment and transaction processing systems; and a technology product auction service located at www.auctions.vtechco.com.
Statements in this Press Release that are not purely historical are ''forward looking statements'' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding VTC's expectations, hopes, beliefs, intentions or strategies regarding the future generally, VTC's growth strategy, future sales and anticipated trends in VTC's business. All forward looking statements included in this Press Release are based on information known to VTC on the date hereof, and VTC assumes no obligation to update any such forward looking statements. It is important to note that actual results could differ materially from those in such forward looking statements as a result of a number of factors, most of which are out of the control of VTC, including, but not limited to, VTC's early stage of development, its lack of profitability and cash flows and competition for the sale of hardware and software products both on and off the internet. As to the Tech Squared acquisition, there is no assurance that VTC will consummate the acquisition or that it can successfully and profitably integrate Tech Squared's business into VTC's operations.
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Contact:
Virtual Technology Corporation, Minneapolis
Kim Davis
612/915-1122
kim.davis@vtechco.com
or
Investor & Public Relations
Lanzet, Inc.
Herb or DeeDee Lanzet
212/687-0061
lanzet@aol.com |
