Press Releases
Intrinsyc to Acquire Certain Assets of Destinator Technologies
Acquisition delivers assets to enhance Soleus™ software business and accelerate growth of Intrinsyc’s wireless software revenues and customer base
Intrinsyc Hosts Conference Call Today at 5:30 a.m. Pacific Time
Vancouver, BC – Tuesday, May 20, 2008 – Intrinsyc Software International, Inc. (TSX: ICS), a global wireless software solutions provider, today announced that it has entered into an asset purchase agreement to acquire certain assets and operations of Destinator Technologies Inc. (Destinator), a provider of wireless software for global positioning system (GPS) devices and navigation software for wireless handsets. The acquisition is subject to court administered restructuring proceedings in Canada and the United States involving Destinator and certain of its affiliates and is expected to take six to eight weeks to complete.
The assets which, upon approval, Intrinsyc will acquire include a highly skilled wireless software development center in China, an advanced development center in Israel, existing navigation and wireless software products and seventeen patents granted or pending. Under the terms of the agreement Intrinsyc will only assume facilities for Destinator’s two development locations, Beijing, China and Herzliya, Israel, and will not assume other financial liabilities of the company. Intrinsyc plans to integrate these technical operations, as well as selected key personnel in other functions, within the existing Intrinsyc leadership structure, thereby lowering operating costs and capturing synergies quickly.
“This transaction delivers critical engineering and development resources that will lower Soleus development costs and increase engineering capacity that will accelerate Intrinsyc’s growth as a wireless software solution provider,” said Glenda Dorchak, Chairman and Chief Executive Officer of Intrinsyc Software. “Destinator has built a deeply talented technical team which has a proven track record in delivering wireless and handheld navigation software products. With the acceleration of the transition from standalone personal navigation devices (PNDs) to navigation in wireless phones and connected PNDs, we see a tremendous opportunity to marry their navigation technology with our Soleus software such that it will increase our addressable market and accelerate Intrinsyc’s wireless software revenues. We also expect synergies with Destinator and Soleus customers which will expand the market opportunity for both product families.”
Destinator’s customers include tier one Original Equipment Manufacturers (OEMs), such as Motorola, Inc., with whom they have collaborated in the development of navigation technologies for the MOTO Ming and MOTO ROKR E6 series mobile phones. Destinator navigation software is compatible with all major operating systems and can be easily customized to work on any hardware vendor’s platform across the Windows® Embedded CE, Windows Mobile®, Symbian®, and Linux operating systems.
Ms. Dorchak concluded, “This transaction structure enables Intrinsyc to assume specific strategic assets and customer engagements, along with key personnel, that are a strong complement to our own operations. Intrinsyc’s experienced leadership team is able to improve the value capture of the combined products and technologies, grow the customer base for both the Soleus and Destinator products and improve our software revenues and gross margins faster than our current resources allow. We have structured a transaction to enable us to maintain a healthy balance sheet which will support integration and ongoing operations of the collective business. We expect to provide further information on financial assumptions following successful completion of the auction process and the deal closing.”
Terms of the Agreement
Under the terms of the transaction, Intrinsyc will pay CDN $8.5 million in cash or assume of liabilities of Destinator, as well as issue 11.0 million Intrinsyc common shares from treasury. All common shares issued pursuant to this transaction will be subject to a six-month lock-up agreement.
To assist Destinator in meeting its working capital requirements during the restructuring process, prior to the close of the transaction, Intrinsyc will advance up to U.S. $2.0 million to Destinator in the form of debtor in possession interest-bearing financing secured by a court-ordered super-priority charge on Destinator’s Canadian and U.S. assets. The amount advanced by Intrinsyc under the facility is to be credited against the purchase price on closing or repaid from the proceeds of sale should Intrinsyc not be the successful bidder.
The acquisition is subject to higher bids to be solicited in an auction process (in which Intrinsyc may participate) that will be administered by the courts in Canada and the United States overseeing Destinator’s restructuring process. The acquisition is also subject to customary closing conditions and the issuance of court orders vesting Destinator’s assets in Intrinsyc. Accordingly, the closing of the acquisition is not expected to occur until July 2008. If unsuccessful in its offer, Intrinsyc is eligible to receive a break fee equal to three per cent of the purchase price and the reimbursement of certain transaction-related expenses.
Subject to transaction approval by the courts, Intrinsyc intends to integrate each of Destinator’s development teams and utilize a portion of Destinator’s business operations to build out Intrinsyc’s wireless software solution capabilities globally.
Conference Call and Slide Presentation Information
Intrinsyc will host a conference call on Tuesday, May 20, 2008 at 5:30 a.m. Pacific Time (8:30 a.m. Eastern Time). This conference call will be broadcast live over the Internet with a slide presentation and may be accessed by all interested parties on the Investor section of Intrinsyc’s web site. On the call, Glenda Dorchak, Chairman and Chief Executive Officer, and George Reznik, Chief Financial Officer, will discuss the proposed Destinator transaction. Investors and analysts are invited to participate on the call. To listen to the live call, please go to the Investor section of Intrinsyc’s web site at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software.
When: Tuesday, May 20, 2008
Time: 5:30 a.m. PT / 8:30 a.m. ET
Dial In: 1-866-400-2280; outside of the U.S. 416-850-9143
Live Web Cast: http://www.intrinsyc.com/investors/conference_calls.aspx
For those unable to participate in the live conference call, a replay will be available shortly after the completion of the call and will be available on Intrinsyc’s web site for approximately 3 days. The replay number is 1-866-245-6755 with a pass code of 766543. International callers should dial 416-915-1035 and enter the same pass code at the prompt.
About Destinator
Destinator develops, markets and sells software that enables GPS navigation functionality in a variety of devices such as mobile phones, smart phones, personal digital assistants (PDAs), PNDs and in-dash after-market automobile navigation systems. Destinator’s software is compatible with all major device operating systems and can be easily customized to work on any hardware vendor’s platform. Its leading software products – Destinator PND, Destinator SDK and Destinator TrafficSam – offer flexibility and customization potential to OEMs and wireless vendors. In addition to its software products, Destinator offers full marketing and sales support on a global basis. Founded in 2003, Destinator maintains offices in the United States, Canada, Germany, Israel, Taiwan and China. Destinator was awarded for the second time the “BEST Partner Award 2007” by Motorola’s China R&D Centre for the development of tailor-made navigation software for Motorola at the fourth annual Motorola China Technology Symposium in October 2007.
About Intrinsyc Software International, Inc.
Intrinsyc provides software solutions that enable next-generation handheld products, including mobile handsets, smart phones, and embedded devices. The company’s products include the Soleus® software platform for converged device development and Destinator® navigation software. Combined with award winning Solutions Engineering and 12 years of systems integration expertise, these solutions help device makers, and silicon vendors deliver compelling mobile and embedded products with faster time-to-market and higher quality. Intrinsyc is a Microsoft Windows Embedded Gold Partner and a winner of Windows Embedded Excellence Awards in 2007 and 2008, a Nokia S60 and Symbian Competence Center and Symbian Platinum Partner. Intrinsyc is publicly traded (TSX: ICS) and headquartered in Vancouver, Canada, with offices in China, Israel, Taiwan, U.K., and the United States.
www.Intrinsyc.com
© 2008 Intrinsyc Software International, Inc. All rights reserved.
Intrinsyc, Soleus, Destinator and their respective logos are trademarks, registered and otherwise, of Intrinsyc Software International, Inc. in Canada, European Union, Taiwan, United States of America and other jurisdictions. Other products and services mentioned in this document are identified by the trademarks or service marks of their respective companies or organizations.
Forward Looking Statements
This press release contains statements which, to the extent that they are not recitations of historical fact, may constitute forward-looking information under applicable Canadian securities legislation. Such forward-looking statements or information may include financial and other projections as well as statements regarding the Company's future plans, objectives, performance, revenues, growth, profits, operating expenses or the company's underlying assumptions. The words "may", "would", "could", "will", "likely", "expect," "anticipate," "intend", "plan", "forecast", "project", "estimate" and "believe" or other similar words and phrases may identify forward-looking statements or information. Persons reading this press release are cautioned that such statements or information are only predictions, and that the Company's actual future results or performance may be materially different. Factors that could cause actual events or results to differ materially from those suggested by these forward-looking statements include, but are not limited to: the Company’s ability to continue to earn the revenue from Destinator products after the acquisition, and to integrate the acquired business into its own operations; the need to develop, integrate and deploy software solutions to meet our customer's requirements; the possibility of development or deployment difficulties or delays; the dependence on our customer's satisfaction; the timing of entering into significant contracts; our customers’ continued commitment to the deployment of our solutions; the risks involved in developing integrated software solutions and integrating them with third-party products and services; the performance of the global economy and growth in software industry sales; market acceptance of the Company’s products and services; customer and industry analyst perception of the Company and its technology vision and future prospects; the success of certain business combinations engaged in by the Company or by its competitors; political unrest or acts of war; possible disruptive effects of organizational or personnel changes; technological change, new products and standards; risks related to acquisitions and international expansion; reliance on large customers; concentration of sales; international operations and sales; management of growth and expansion; dependence upon key personnel and hiring; reliance on a limited number of suppliers; industry growth; competition; intellectual property; product defects and product liability; currency exchange rate risk; and including but not limited to other factors described in the Company’s reports filed on SEDAR, including its Annual Information Form and financial report for the year ended December 31, 2007. In drawing a conclusion or making a forecast or projection set out in the forward-looking information, the Company takes into account the following material factors and assumptions in addition to the above factors: the Company’s ability to execute on its business plan; the acceptance of the Company’s products and services by its customers; the timing of execution of outstanding or potential customer contracts by the Company; the sales opportunities available to the Company; the Company's subjective assessment of the likelihood of success of a sales lead or opportunity; the Company's historic ability to generate sales leads or opportunities; and that sales will be completed at or above the Company's estimated margins. This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. All forward-looking statements made in this press release are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by the Company will be realized. The Company disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
For more information, please contact:
Investor Relations:
Beverly Twing
Shelton Group
Email: btwing@sheltongroup.com
Phone: (972) 239-5119 ext. 126
Media Contact:
Brad Zaytsoff
Intrinsyc Software International, Inc.
Email: bzaytsoff@intrinsyc.com
Phone: (604) 648-4038