U.S. Bankruptcy Court Approves Legacy Acquisition of Rexon for US$20 Million.MARKHAM, Ontario--(BUSINESS WIRE)--March 4, 1996--Legacy Storage Systems International Inc. announced today that the Bankruptcy Court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. for the District of Colorado (the "Bankruptcy Court") has approved the acquisition by Legacy of all the shares of Rexon Incorporated ("Rexon") as part of a plan of reorganization of Rexon and pursuant to the terms of a purchase agreement entered into on December 8, 1995 as amended as of February 15, 1996. The acquisition is scheduled to close today, March 4, 1996. "The acquisition of Rexon, which follows last year's acquisition of Quasarmetrics Inc. is part of our well-defined strategy to position Legacy as a global leader in the field of data storage," said David Killins, President & CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Legacy. "These acquisitions give us new proprietary technology as well as major additions to our manufacturing and distribution infrastructure. Our much strengthened product mix and distribution network together with our strong working capital position and debt free balance sheet should ensure rapid growth for Legacy in the coming years." He added: "Rexon will continue to manufacture and distribute Wangtek, WangDat and Tecmar brand products, as well as Legacy- manufactured SmartArray RAID and CD servers, and will sell these products through its channel partners in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Europe. Meanwhile, Legacy will concentrate on expanding sales of its breakthrough VAST HSS HSS Humanities and Social Sciences HSS High Speed Steel HSS Home Subscriber Server (3GPP) HSS Hospital for Special Surgery (New York, NY, USA) HSS Hospital for Special Surgery HSS History of Science Society mass storage system." "We will now have access to more than 100 additional channel partners including Merisel, Ingram Micro Ingram Micro, Inc. NYSE: IM a Fortune 100 company founded in 1979 and based in Santa Ana, California. It is the world’s largest technology distributor and a leading technology sales, marketing and logistics company. and Tech Data," says Mitch Vine, Executive Vice-President, for Legacy. "In addition, Legacy now has access for its product lines to a number of established major OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and and VAR customers, including major international computer manufacturers." The purchase price for the acquisition is: a) U.S. $11,562,500 in cash; b) a promissory note promissory note, unconditional written promise to pay a certain sum of money at a definite time to bearer or to a specified person on his order. Promissory notes are generally used as evidence of debt. of Legacy in the principal amount of U.S. $4,250,000; c) the assumption of certain Rexon debtor in possession financing debtor in possession financing Financing arranged during the time a company is in Chapter 11 bankruptcy. in an amount not to exceed U.S. $2,100,000; d) the conversion of U.S. $2,000,000 of debtor in possession debtor in possession n. in bankruptcy proceedings when a debtor has filed for the right to submit a plan for reorganization or refinancing under Chapter 11, and the debtor is allowed to continue to manage his/her/its business without an appointed trustee, that debtor financing provided by Legacy to Rexon into common shares of Rexon; and 3) U.S. $100,000 payment in cash and the assumption by Legacy of certain executory contracts and unexpired leases. Net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). in the amount of Cdn. $23,607,600 from the issuance by Legacy of 19.2 million special warrants at Cdn. $1.65 per special warrant on December 8, 1995 which have been held in escrow by Montreal Trust Company of Canada pending the Bankruptcy Court approval have been released today to fund the acquisition and to be used by Legacy as working capital to fund the growth of Legacy and Rexon. Legacy filed a prospectus in Ontario dated February 29, 1996 relating to the offering by Legacy of 5.2 million units at Cdn. $2.65 per unit, each unit composed of one common share and one-half of one common share purchase warrant. Each whole common share purchase warrant entitles the holder to acquire one common share at Cdn. $3.00 per share until March 8, 1998. Legacy will receive Cdn. $12,884,300 net proceeds on the issuance of the units which is scheduled to occur on March 8, 1996. Legacy will use U.S. $4,250,000 of these funds to repay the note issued as partial consideration for the acquisition. The balance will be used as working capital to fund the growth of Legacy and Rexon. Legacy Storage Systems International Inc. is a personal computer peripheral systems corporation operating in the data storage subsystems sector of the computer systems industry. Legacy manufactures, assembles and distributes data storage subsystems for the personal computer local area network environment, provides technical support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services to any users of its products for all major operating systems. Legacy's products are marketed worldwide to Fortune 500 companies. CONTACT: Legacy Storage Systems International Inc. David Killins, 905/475-1077 or Alain Lambert, 514/844-7212 |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion