EZENET to Acquire Wealth Management Solutions Inc.
Acquisition allows EZENET to expand product offering, accelerate U.S.
expansion, and increase client base
TORONTO, July 21 /CNW/ - EZENET Corp. (CDNX: EZE), a leading software and
IT solutions provider, announced today that it has signed a letter of intent
to purchase all of the issued securities of privately-held Wealth Management
Solutions Inc. (WMSI), a Toronto- based software development company. WMSI is
EZENET's second acquisition since closing a $50-million Special Warrant
financing earlier this year.
The proposed acquisition will expand EZENET's client base, broaden its
product offerings, increase EZENET employees by 120 per cent and add senior
management and technical strength to EZENET's operations. WMSI's 1999 revenues
(year ended December 31) of $4 million, combined with its debt-free status and
profitability, make WMSI a significant and strategic investment for EZENET.
EZENET customers and strategic alliance partners will benefit from the wealth
management solutions offered by WMSI, which complement EZENET's financial
service offerings.
The purchase will be funded by $5 million in cash and 505,051 of common
or convertible preferred shares, which will be determined in the definitive
agreement and priced. Furthermore, should WMSI achieve certain fiscal year
2000 revenue targets, Ezenet will make an additional deferred payment of up to
$1 million in cash and 101,010 in common or convertible preferred shares. The
shares issued in this transaction will be subject to an escrow agreement
between EZENET and the WMSI shareholders, releasable at various times over a
30-month period.
The Agreement is subject to a number of conditions, including execution
of a definitive Purchase and Sale agreement and requisite regulatory
approvals. The transaction is expected to close in early August.
"This transaction is part of EZENET's ongoing strategy to establish a
critical mass in Canada, expand our product offerings to financial
institutions, along with accelerating our entry into the U.S. market," said
Kasra Meshkin, President and Chief Executive Officer of EZENET. "Since going
public in March 1999, EZENET has continued to build on its strong foundation
with additions to management, targeted acquisitions, and technology
developments. This acquisition is a logical step in our long-term development
strategy. We believe there to be excellent synergies between EZENET and WMSI."
Following the closing of this transaction, Jay Cashmore, founder of WMSI,
will join EZENET as President of Canadian Operations and become a member of
EZENET's Board of Directors. Jay Cashmore brings over 30 years of experience
in the financial services industry, including 5 years as President of
FootPrint Software Inc. and over 2 years as President of WMSI.
"There is powerful synergy between our two companies," said Mr. Cashmore.
"EZENET's acquisition of WMSI will allow the combined entity to accelerate
development of its wealth management software, for distribution in both Canada
and the U.S. market to meet the growing demand for consolidated investment
plan management. Our companies' combined experience in the financial services
market, in conjunction with our firms' technical proficiency, makes this
transaction a mutually beneficial undertaking for all our staff, our
customers, and our investors."
With more than 15 years in the wealth management sector, WMSI brings
EZENET experienced management, new and distinct product lines, positive cash
flow and a team of well-respected professionals from the financial services
industry.
About Wealth Management Solutions Inc.
The management and staff of Wealth Management Solutions Inc. (WMSI) have
been developing software exclusively for the financial services sector since
1983 and is the recognized leader in the development of investment plan and
asset administration systems. WMSI's wealth management solutions enable their
clients to conduct business in an efficient and profitable manner so that
they, in turn, may more efficiently service the needs of their customers -
wealth management investors. WMSI offers a wide range of products and services
including, mortgage underwriting and management systems, mortgage backed
securitization, bond management and processing systems, and the full spectrum
of investment plan and asset administration systems. These systems are
available on a license basis for in-house operation or under a fully secure
Application Service Provider (ASP) offering. WMSI was named as one of the top
25 "Up-and-Comers" in an annual survey of Canadian IT companies conducted by
Branham Group Inc. ("The Financial Post Magazine, March 1999"). More
information can be viewed at www.wmsi.ca.
About EZENET
EZENET Inc. is a Toronto-based information technology company that
provides full-service technology and software solutions to the financial and
banking industries, including online software, network services, full Internet
capabilities and enhanced security. EZENET's solutions are currently deployed
in some of the Canada's largest banks, major financial institutions and
several trust and insurance companies.
The Canadian Venture Exchange has neither approved nor disapproved the
information contained herein. |
