Alpharel Inc. announces plans to acquire Trimco Group plc.

SAN DIEGO--(BUSINESS WIRE)--Nov. 20, 1995--Alpharel Inc. (NASDAQ/NMS:AREL) Monday announced that it has signed a letter of intent to acquire all of the stock of Trimco Group plc, a supplier of enterprisewide document management systems based in the United Kingdom.

Under the terms of the letter of intent, total consideration for the Trimco stock would be $14,650,000, composed of $6,550,000 in cash and $8.1 million in Alpharel common stock.

The number of shares of Alpharel common stock to be issued is based on the lesser of (a) average daily closing market price of Alpharel's common stock on NASDAQ for the period commencing on July 17, 1995, and ending on the trading day immediately prior to the closing date of the acquisition and (b) the average daily closing market price of Alpharel common stock on the 10 trading days immediately prior to the closing date.

Jay Tanna, managing director of Trimco Group and his family would become the single-largest shareholder of Alpharel, holding approximately 7 percent of the outstanding shares.

Alpharel President and Chief Executive Officer Stephen Gardner stated, ``We believe the combination of the two companies would accelerate their respective efforts to achieve a global presence and access to worldwide channels of distribution with greater momentum than would have been the case had either company acted independently.''

Tanna stated: ``Trimco's success has been based on our long-standing commitment to providing high-quality products and services. Both Trimco and Alpharel intend to support all our customers with our existing product sets in the near term. Longer term, I believe technology exchange and common development efforts with Alpharel can lead to more rapid introduction and completeness of next-generation products.''

For the year ended June 30, 1995, Trimco posted a profit of $363,000 on revenue of $8,842,000, as compared with the year ended 1994 profit of $288,000 on revenue of $6,639,000. As of June 30, 1995, Trimco's total assets amounted to $4,674,000 and its working capital was $506,000.

The company employs more than 90 people worldwide. Trimco customers include British Petroleum, Eurotunnel, the London Underground, Entergy, Air Products, European Space Agency, Amoco and Royal Dutch Shell.

In 1994, Alpharel posted profit of $275,000 on revenue of $9,547,000. For the nine months ended Sept. 30, 1995, the company had profit of $881,000 on revenue of $9,629,000. Alpharel employs more than 100 people. Customers include Continental Airlines, Westinghouse, General Electric, Chrysler Technologies, Caterpillar, Union Electric and Electricite de France.

Together the combined companies would have a customer list of more than 1,000 customer organizations, representing major markets in utilities, transportation, oil and gas, manufacturing, construction, telecommunications and media, government and financial services.

Alpharel expects to consummate the transaction in December 1995, however such consummation is contingent upon the approval of all Trimco shareholders, the receipt of financing by Alpharel to fund the cash portion of the purchase price and other customary conditions.

After consummation of the acquisition, Alpharel would make cash expenditures of approximately $910,000 and issue shares of company common stock having a value of approximately $640,000 (at the time of closing) to provide incentives to Trimco personnel to remain in Trimco's employ after the closing and to facilitate the integration of the operations of Alpharel and Trimco.

Following completion of the acquisition, Trimco Group plc would be known as Trimco, an Alpharel Company. The two companies would keep their respective names in their respective markets. Channel partners of the two companies would have access to products from both companies.

Tanna would become executive vice president of Alpharel and managing director of Trimco Operations. Tanna would join Alpharel's board of directors. Gardner and Robert T. Bruce, chairman of the board of directors, would remain in their respective positions.

Bruce stated: ``I am pleased that Jay Tanna will become an officer, director and significant shareholder of Alpharel. He should, with his experience of managing Trimco's expansion from a start-up company in 1988 to its present size, be able to help the two companies grow.''

Alpharel and Trimco are leading suppliers of open imaging software for enterprisewide solutions. Each of companies' client/ server software components, operating in many different software environments and supporting multiple communication architectures, provide the ability to add document management to existing applications through enabling product sets or to create complete turnkey document management solutions.

Both companies support Windows, Macintosh and UNIX clients, together with servers from Sun, Hewlett-Packard, IBM, Data General and Silicon Graphics. Both Alpharel and Trimco specialize in the management of complex situations with many users, often with different technology, using global networks, to access many types of documents, from very large to very small.

CONTACT: Alpharel Inc., San Diego 

Stephen P. Gardner/John W. Low, 619/625-3000

619/546-7671 (fax) or [e-mail]