Calnex Solutio. Regulatory News (CLX)

17 May 2006 07:02

Matrix Communications Group PLC17 May 2006 Matrix Communications Group Plc Proposed Disposal of Integration Division for up to £40.5m Matrix Communications Group Plc ('Matrix' or 'the Group') announces that itplans to sell its Integration Division to Calyx Group plc ("Calyx"), one of thelargest single-source providers of information and communication technologynetwork solutions in Ireland, for up to £40.5 million in cash and shares. Transaction • The consideration will comprise of an initial cash element of £33.5million and £2.0 million in Calyx shares. • Deferred payment of up to £3.0 million and £2.0 million will bepayable, based on earn outs in the periods June to December 2006 and January toMay 2007 respectively. • Matrix retains an equity stake (locked-in for up to two years) torealise a share of any future gain from the combined entity, which will be oneof the largest independent integration groups covering the UK and Ireland and atop 10 player in terms of its turnover. • The Integration Division, which excludes the Fujin mobile contentfiltering business, is the main source of revenue and profit for the Group andin the year to 31 October 2005 had proforma revenue of £35.2 million andoperating profit contribution before tax of £4.1 million. The net assets as at31 October 2005 were £18.9 million, comprising operating net liabilities(excluding net debt and inter company balances) of (£0.4) million and goodwillof £19.3 million. Including goodwill, the total gross assets were £30.3 million. • In accordance with Rule 15 of the AIM Rules, the Board will seekapproval from shareholders at an EGM, which is being convened on 9 June 2006. Acircular containing full details of the proposals set out in this announcementwill be posted to shareholders shortly. Fujin Technology plc • Subject to shareholder approval at the EGM, the Group will change itsname to Fujin Technology plc ("Fujin") as it focuses on developing and deployingworld-leading technology in the field of content filtering and enabling formobile operators. • Fujin will continue its international deployment with Vodafone and itsrecently announced new contract with another major European mobile operator. • The Board expects Fujin to launch its first internally developedappliance in June 2006 and believes Fujin will complete the first stage of itsown designed and developed content filtering engine in July 2006. • The Board continues to regard Fujin as having the potential togenerate significant shareholder value. It believes that the realisation ofoptimal returns for shareholders from Fujin is likely to involve the developmentof strategic partnerships and consequently has already commenced discussionswith potential partners. Use of Proceeds • In order to maximise value for the Company's shareholders, adistribution of cash will be made in the near future. The Board expects that theinitial distribution of cash to shareholders will be in the region of £10million. Board • Ian Smith, the Group's CEO, will also become a non-executive Directorof Calyx. • Tony Weaver, the Group's COO, will become Managing Director of Calyx'sUK business. He will become a non-executive Director of Matrix. • All the current Directors will continue as Directors of Matrix, savefor Ric Piper who will step down as a non-executive Director of the Company onCompletion. Ian Smith, Matrix Chief Executive commented: "We believe that through this disposal we are realising good value today for theIntegration Division, whilst benefiting further from a share of any future gainsof the combined entity. In a fast consolidating market, our IntegrationDivision needed to scale up rapidly to take part in the growth opportunity inmanaged services. This transaction will secure the future success of theIntegration business and its employees as part of an enlarged Group which is nowa top 10 in this sector in the UK and Ireland. "We intend to build Fujin into a major content management business in the mobilesector. Accordingly the Board continues to regard Fujin as having the potentialto generate significant shareholder value." 17 May 2006 Enquiries Matrix Communications 01342 871 888 Ian Smith, Chief Executive OfficerTony Weaver, Chief Operating Officer College Hill 020 7457 2020 Adrian Duffield / Corinna Dorward This information is provided by RNS The company news service from the London Stock Exchange