Storage One to Acquire Leading Web Strategist and
Solutions Developer
TORONTO, ONTARIO--Storage One Inc. ("Storage") announced today
that it has entered into an agreement to acquire 100 percent of
the shares of Generation Net Services Inc. ("Generation Net") of
Montreal, Quebec. Generation Net specializes in the conception
and realization of web-based business strategies and solutions,
including Web site/Intranet/Extranet development, e-commerce, and
web hosting. Generation Net, which has annualized run rate
revenue of over $4 million, shall be acquired for a total purchase
price of $11 million consisting of $5,000,000 cash and 6,000,000
shares. The acquisition of Generation Net is subject to
regulatory approval.
Generation Net's clients include such companies as Alliance
Atlantis Communications, Bristol-Myers Squibb, Canadian National,
History Television, Showcase Television, CHOM FM, Royal Lepage,
Cadillac Fairview, A.L. Van Houtte, Holt Renfrew, Aldo Shoes, The
Quebec Liquor Board, Radio Canada, Microsoft Canada, Microsoft
Network, the Comedy Network, Astral Communications, Southam
Newspapers, Gaz Metropolitain, Bentley Group, Casa Loma, and Fuji-
Xerox Laboratories.
Generation Net has solidified its position as a leading Web
strategist/developer by bringing together, under one roof, the
rare combination of superior creative and technical talent,
professional sales and marketing personnel, and an experienced
management team. Generation Net, with 55 employees and offices
in Montreal and Toronto, has coordinated and executed over 100
successful Web projects and has received numerous awards for both
design and technical achievement. The company anticipates
doubling the number of its employees over the next year.
On June 15, 1998, Generation Net was selected as one of the
charter members of Montreal's Multimedia City. As part of this
program, the company will receive tax credits equivalent to
approximately 40 percent of its development payroll for the next
10 years. The Multimedia City program provides the company with a
tremendous opportunity to expand its presence in U.S. and European
markets. Generation Net's low development cost base coupled with
the relatively low Canadian dollar enables the company to provide
clients in those markets with extremely cost-effective Web
solutions, while maintaining substantial profit margins.
Storage's acquisition of Generation Net follows its recently
proposed acquisition of web developer, Rollercoaster Studios Inc.
("Rollercoaster"). The two entities will be merged to form one of
Canada's largest web strategy and development companies with
estimated revenues of over $7 million in the coming year. Says
John McMahon, Storage's Chairman, "This new merged entity will be
at the core of the Company's expanding operational presence,
providing the creative capital and technical expertise required by
our target customer: The E-Commerce Entrepreneur. The addition of
Generation Net bolsters Storage's market presence and re-enforces
the Company's commitment to be the pre-eminent provider of web
development, e-commerce solution and Internet consulting
services."
Says Garner Bornstein of Generation Net, who will assume the
position of CEO of the merged entity, "This deal is extremely
synergistic. The key pieces are in place - Generation Net's
expertise and track record in the evaluation and realization of
strategic Web initiatives and Storage's strong financial backing
and network of contacts".
According to a research report by ActivMedia Inc., corporate
investment in Web technologies and services in North America is
expected to increase from approximately $2.0 billion in 1998 to
over $22 billion in 2003.
Following the proposed acquisition of Generation Net and
Rollercoaster, the Corporation will provide Web development
services, e-commerce solutions and strategic Internet consulting.
Furthermore, Generation Net and Rollercoaster will also create and
develop unique Internet media assets for the Corporation.
The Corporation's venture capital division, SOI Invests, makes
investments and takes ownership positions in promising start-up
companies that want to promote and sell their products over the
Internet. SOI Invests has made two investments and continues to
seek strategic financing opportunities.
The Corporation also provides proven storage technology
peripherals and devices to value added resellers, systems
integrators and original equipment manufacturers. The Corporation
is currently revising its business model to harness the
distribution capabilities of the Internet. Historically,
Peripherals Place (www.peripheralsplace.com) has been the
Corporation's Web destination for marketing and distribution of
the Corporation's end-of-line products and excess inventory,
however, the site is currently dormant. The Corporation intends
to create a total e- commerce solution through the enhancement of
the Peripherals Place web site to make it the primary vehicle for
the sales of the Corporation's data storage products.
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