Datatec, the international networking and IT services group, and Versatile Mobile Systems of Canada yesterday announced an agreement to sell mobile enterprise applications provider RangeGate to Versatile in exchange for 23 million Versatile common shares.
The Versatile common shares are to be divided between Datatec with 20 million shares and RangeGate`s management with three million. Versatile`s shares were trading yesterday at C$0.28, which values Datatec`s share of RangeGate at C$5.6-million (ZAR44-million). This agreement is still subject to regulatory approval, with 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 C$17.3 million and the company has a strong working capital position - C$8.0 million as at September 30, 2001.
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," says John Hardy, Chairman and CEO of Versatile. "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," he says.
"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," says Gordon Edwards, Chairman of RangeGate. "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," he says.
"It was an obvious choice to combine RangeGate and Versatile," says David Pfaff, Executive Director of Datatec. "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," he says.
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.
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