| Thu 20 Dec 2001, 0:00 | | Versatile Mobile Systems To Purchase Rangegate |
|
Datatec Limited
December 19, 2001
Datatec Ltd (JSE: DTC) (`Datatec'), an international networking and IT
services group, and Versatile Mobile Systems (Canada) Inc. (CDNX: VMS)
(`Versatile'), a leading mobile commerce solutions provider, today announced
an agreement to sell RangeGate (Pty) Ltd. (RangeGate) from Datatec and
RangeGate management to Versatile in exchange for 23 million Versatile
common shares.
The Versatile common shares are to be divided between Datatec (20 million)
and RangeGate's management (3 million). Versatile's shares were trading at
C$0.28, which values Datatec's share of RangeGate at C$5.6-million (ZAR44-
million). This agreement is subject to, inter alia, regulatory approval,
signing of the necessary formal agreements and final due diligence with
closing scheduled for January 31, 2002.
Versatile provides Mobile Commerce solutions that enable enterprise
integration of sales, marketing and logistics processes to drive revenue and
improve operational efficiency. Versatile partners with high technology
leaders such as Symbol Technologies, Fujitsu, Qualcomm and the Descartes
Systems Group. Focused largely on the North American and European markets,
the company's international customer list includes Cadbury Schweppes,
Elizabeth Arden, Ocado, Bridgford Foods and Keebler.
Versatile's revenues for the year ended June 30 2001 were Cdn $17.3 million.
The company has a strong working capital position - Cdn $8.0 million as at
September 30, 2001 - and expects to commence generating positive EBITDA and
gain market share during the year ahead.
As a 12 plus year old pioneer of mobile computing solutions with over 900
live mobile computing sites in the United Kingdom and South Africa,
RangeGate is a leading provider of Mobile Enterprise Application solutions.
The company's solutions encompass the mobilisation of corporate sales and
field services, the wireless optimisation of warehouse control, logistics
control, cargo and freight handling and mobile in-store fulfilment for home
shopping. RangeGate's strategic alignment with Symbol Technologies, SAP,
Microsoft, Lotus/IBM and Oracle will strengthen and compliment Versatile's
already considerable vendor partnerships. Additionally, RangeGate's blue-
chip customer base - which includes Exel, Littlewoods, Sainsburys, Delta,
Daimler Chrysler, Toyota, Spar, Robertsons, Pick 'n Pay, Johnson & Johnson,
World Bank and a number of Telcos - will provide a good field of opportunity
for Versatile's considerable Mobile Commerce product portfolio.
"The combination of Versatile and RangeGate will result in both operational
efficiencies and significantly accelerated revenue growth. RangeGate has
consistently proven to be a strong competitor in the UK. Having worked on
several projects co-operatively it made sense to join forces and gain from
each other's expertise and technology. Additionally, we believe that the
benefits associated with a larger footprint in the Mobile Enterprise
Application space will be considerable," says John A. Hardy, Chairman and
CEO of Versatile.
RangeGate expects to gain a greater percentage of the Mobile Enterprise
Application's market by joining rather than competing with Versatile. "The
combination of technologies, customer experience and overall domain
expertise that the merged company will command creates an extremely
attractive value proposition for our end customers. With mobile applications
becoming an integral part of mission critical Enterprise solutions, our
customers are looking for proven providers capable of demonstrating a wide
range of real world systems with strong return on investment histories. The
merged company has the kind of impressive portfolio of industry wins to give
its current and prospective customers the right levels of comfort, this is
what wins large contracts and gains market position", says Gordon Edwards,
Chairman of RangeGate.
From Datatec's perspective, this deal is aligned with the company's goal of
realizing value from its operating subsidiaries through non-South African
listings. It also marks a further logical step in the reorganization of
Datatec's South African interests. "It was an obvious choice to combine
RangeGate and Versatile. In our final analysis the fit between the two
companies was highly synergistic, Versatile has demonstrated their
management skills in effectively integrating new acquisitions. We see very
strong prospects for leadership in the high-growth Mobile Enterprise
Application market with Versatile. Datatec looks forward to maintaining a
long-term shareholding and working with Versatile to help drive their
company's growth going forward. Clearly, as a large shareholder it is in our
best interest to create the strongest and most profitable company possible -
the combination of the two was the best way to effect that goal" says David
Pfaff, Executive Director of Datatec.
Jens Montanana has been a director of Versatile Mobile Systems since 1997,
owns approximately 2.2% of the issued share capital and holds 350,000
options. He also owns approximately 5% of Datatec Limited issued share
capital and holds 1 000 000 options. He declared his interest and has not
participated in any of the decisions concerning the sale.
Ends
Contacts:
David Pfaff, Datatec,
(T) +27 (11) 233-1221, (E) davidpf@datatec.co.za
Russ Millward, Versatile,
(T) 604 662 7551 (604) 683-2915, (E) rmillward@versatilemobile.com
Jonathan Newman, RangeGate,
(T) +27 (11) 723-9300, (E) jonathan.newman@za.rangegate.com
Safe Harbor Statement
Certain information in this press release contains ``forward looking
statements'' within the meaning of the Securities Exchange Act of 1934,
including those concerning the Company's future results and strategy. Actual
results could differ from those in the forward looking statements due to a
number of uncertainties, including, but not limited to, the demand for the
Company's products and services; the size, timing and recognition of revenue
from significant orders; increased competition, changes in Company strategy
product life cycles; the impact of rapid technological advances, evolving
industry standards, changes in customer requirements, and fluctuations in
foreign exchange rates.
The Company's expense levels are based, in part, on its expectations as to
future revenue and a significant portion of the Company's expenses do not
vary with revenue. As a result, if revenue is below expectations, results of
operations are likely to be materially adversely affected.
Notes to Editors:
About Datatec - www.datatec-group.com
Datatec is an international networking and IT services company with
operations in many of the world's leading economies. The Group provides
active management support in the strategic direction and operation of its
subsidiaries and has three international networking focused lines of
business:
Westcon is a global channel provider of advanced networking and Internet
access products;
Logical is focused on the provision of professional services and IT network
integration; and
Mason is a strategic telecommunications consultancy.
By operating in the different stages of the networking supply chain, through
these individually branded businesses, the Group believes it can leverage
its industry and technology position, deal more effectively with vendors,
focus its management and harness its skills base as a sector specialist.
In addition, the group has a number of other operations in South Africa with
similar focused business areas. These are Westcon AME, Affinity Logic and
RangeGate. The Group operates on six continents and generates more than 95%
of its revenue and profits outside South Africa.
About Versatile - www.versatilemobile.com
Versatile Mobile Systems provides mobile commerce solutions that enable
enterprise integration of sales, marketing and logistics processes to drive
revenue and improve operational efficiency. Versatile Mobile Systems
partners with high technology leaders, such as Symbol Technologies, Fujitsu,
Qualcomm and Descartes Systems Group. Versatile's international customer
list includes Cadbury Schweppes, Elizabeth Arden, Ocado, Bridgford Foods and
Keebler.
About RangeGate - www.rangegate.com
For over 12 years RangeGate has focused on leveraging Mobile technologies to
give its customers a competitive edge - a Mobile Edge. The company helps its
customers take advantage of the anywhere, anytime, real-time capability of
wireless technologies in order to optimise business processes and accelerate
ROI on traditional systems. RangeGate's MOBILE-EDGE solutions encompass the
mobilisation of corporate sales and field services, the wireless
optimisation of warehouse control, logistics control, cargo and freight
handling and in-store fulfilment. Over 60% of RangeGate's 100+ strong team
focus on software development and system integration. RangeGate is an
accredited mobile partner of many of the major IT vendors. Strategic
partners include Symbol Technologies, SAP, Microsoft, Lotus/IBM and Oracle.
RangeGate's blue chip clients include Daimler-Chrysler, Johnson & Johnson,
World Bank, Orange, Littlewoods, Sainsburys and ASDA.
