Adams Regulatory News (ADA)

21 Feb 2007 15:22

Adamind Ltd21 February 2007 21 February 2007 Adamind Ltd ("Adamind" or "the Company") Announcement of Proposed Asset Sale Summary Further to the announcement of 12 February 2007, the Board of Adamind announcesthat the Company has reached agreement on the terms of a sale to MobixellNetworks (Israel) Ltd. ("Mobixell") a wholly owned subsidiary of MobixellNetworks Inc., a Delaware company, of substantially all the Company's assets andassignment of certain related liabilities (the "Transaction"). The assetsproposed to be sold include intellectual property, software and contracts withcustomers and suppliers (including software licenses) relating to thedevelopment, marketing and sale of transcoding software, as well as theCompany's tangible assets. In addition, it is proposed that a majority of theCompany's employees will become employees of Mobixell. Based on Adamind'sunaudited consolidated balance sheet at 31 December 2006, the value of the netassets proposed to be sold is approximately $2.4 million. Consummation of the Transaction is subject to customary conditions to closing,including the receipt of any required regulatory and third party consents andthe approval of the Company's and Mobixell's shareholders. Under the terms ofthe Transaction, Adamind will receive as consideration for the assets sold toMobixell $5,500,000 in cash, less an amount of $550,000 that will be depositedin escrow to provide for indemnification for certain damages that may beincurred by Mobixell during the 12-month period following consummation of theTransaction. The foregoing amount may be released to the Company prior to the12-month anniversary of the closing upon the liquidation of the Company. TheCompany intends to post to its shareholders, as soon as possible, a circularproviding detailed information about the Transaction and related matters. After consummation of the Transaction, the Company's assets will consistprimarily of cash, and following consummation of the Transaction, the board ofdirectors intends to consider the options for deploying the Company's cashreserves for the benefit of shareholders, including acquisitions, investment ora distribution of cash to shareholders. If no suitable opportunities can beidentified in the twelve months following approval of the Transaction, theCompany's assets will be distributed to shareholders. At 20 February 2007, the Company's cash balances amounted to approximately $21.6million, which, as at that date, represents approximately 31 pence per Adamind share based on shares currently in issue. This should not be taken as anindication of the value receivable by shareholders on any distribution. Commenting on today's announcement, Orna Berry, Executive Chairperson of theCompany, said: "We are pleased to announce this transaction today which the directors believeis in the best interests of Adamind's shareholders, customers and employees. Thedisposal will generate substantial cash proceeds, which together with Adamind'sexisting net cash holdings, will provide the Board with the means to consideropportunities for increasing shareholder value." The Company also yesterday appointed Mr Johannes Streng, a former member of theCompany's board of directors and member of the audit committee, to serve as anon-executive director on the board and the audit committee. Further detailsrelating to Mr Streng are set out below. At the Extraordinary General Meetingreferred to below, the Company's shareholders will be requested to ratify suchappointment. As announced on 12 February 2007, the Company understands that the FinancialServices Authority ("FSA") is investigating circumstances, statements and/orbehaviour occurring prior to the Company making an adverse trading statement on22 June 2006. The Company shall update the market in due course. Enquiries AdamindOrna Berry, Executive Chairperson +972 9 971 9111Shailendra Jain, CEO +1 801 231 9076 Corfin CommunicationsNeil Thapar, Harry Chathli +44 20 7929 8989 Bridgewell Limited, Nominated AdviserJohn Craven, David Sanders +44 20 7003 3000 Background to the Transaction During the course of 2006, Adamind experienced an unexpected slowdown in demandfor multimedia messaging services and mobile content, and a slower thananticipated level of customer upgrades. These factors caused revenues for thefirst half of 2006 to be materially below market expectations. In response to these difficult trading conditions, the Company's managementundertook during the second half of 2006 a series of measures designed toimprove Adamind's performance and prospects, including the strengthening of theCompany's senior management team, and a review of the Company's cost base. Whilst these measures and the improving market conditions have resulted in asignificant improvement in the Company's financial performance in H2 2006, thedirectors of Adamind believe that, due to continuing uncertainty in timing thegrowth of the messaging market, significant investment is still required inorder to achieve profitability. Due to this risk associated with the Company'sbusiness plan, the directors of Adamind believe that the transaction is in thebest interests of the Company and its shareholders. Extraordinary General Meeting Consummation of the Transaction is subject to approval of the Company'sshareholders. An Extraordinary General Meeting will therefore be convened,notice of which will be contained in the circular to Adamind's shareholders,which the Company expects to have posted on or about 26 February 2007. It iscurrently expected that the Extraordinary General Meeting will take place on orabout 10 April 2007. Johannes Streng (52), Non-Executive Director Hans is currently VP & GM of the Business Unit Emerging Business of PhilipsSemiconductors (now NXP after the LBO of the semiconductors division fromPhilips Electronics). He was also a non-executive director of the Companybetween November 2004 and September 2006. Hans was CEO of the autonomousbusiness group Philips Software in July 2003, which is now in the EmergingBusiness portfolio of NXP. He held positions as a member of the management boardof Philips Digital Networks BV and of Philips Crypto BV and was a Vice Presidentof Philips Electronics. Prior to joining Philips, Hans was a VP of Barconet NV(now part of Scientific Atlanta, Inc.) and CEO of Barconet's Broadband Divisionfollowing Barconet's acquisition of The Industree BV, a company of which Hanswas the founder and CEO. The Industree BV was a leading broadband datacommunications company based in Eindhoven. Prior to this, Hans was VP ofBusiness Development at Simac Techniek NV, a leading Dutch system integratorserving most countries in Western Europe. Details of Mr Streng's current and past directorships are as follows:CurrentThe Industree Harvest BVKlaver6 BV Previous (last 5 years)Adamind Ltd.BarcoNet NVThe Industree BVSimac Techniek NVPhilips Digital Networks BVPhilips Crypto BV Mr Streng is not interested in any shares in the Company and does not own anyoptions to purchase such shares. Mr Streng has confirmed that there are no othermatters to be disclosed in relation to Schedule 2 paragraph g of the AIM Rules. This information is provided by RNS The company news service from the London Stock Exchange