XSCRIBE CORP. ANNOUNCES AGREEMENT TO ACQUIRE ALL OUTSTANDING SHARES OF PHOTOMATRIX CORP.
SAN DIEGO, Jan. 27 /PRNewswire/ -- Xscribe Corp. (NASDAQ: XSCR) announced today an agreement to acquire all of the outstanding shares of Photomatrix Corp. in exchange for shares of unregistered Xscribe common stock. Photomatrix is an affiliate of the Wyly family of Dallas. As part of the transaction, an investment affiliate of the Wyly family will invest $1 million cash in newly issued common stock of Xscribe. Xscribe will issue an aggregate of 5 million unregistered shares of common stock in the transaction in exchange for the stock of Photomatrix and the $1 million of cash. The transaction is subject to a fairness opinion and shareholder approval. Photomatrix designs, manufactures, sells, and services three micro-imaging product lines. Currently, the greatest revenues contributor is a high-speed Microfiche Duplicator sold primarily to Kodak under a private-label, OEM arrangement. The second product line consists of Aperture Card (microfilm) Scanning products and systems designed for engineering applications. These products are currently sold primarily to leading system integrators like PRC Inc., for the U.S. Department of Defense EDMICS program, to Intergraph, Xerox and others. The third product line is a new, high-speed and rugged Document Scanning System, which is ready for customer testing. Total revenues for Photomatrix for the year ended Dec. 31, 1992, will be about $9 million, with no contribution from the new Document Scanning System. Suren G. Dutia, Xscribe's president and chief executive officer, stated, "We are excited about the opportunity to double our revenues in exchange for about one-third of our equity. In evaluating the acquisition, we strongly considered the arrangement with Kodak, which gives us a revenue base from which we can grow. The aperture card scanner has good potential as more and more engineering organizations transition from microfilm to electronic imaging. The document scanner provides us with another growth opportunity through a variety of distribution channels. Both scanners compete in the $1.3 billion electronic imaging industry, which is projected by the Association for Information and Imaging Management ("AIIM") to grow at a rate of greater than 25 percent over the next three to five years. "Although Photomatrix operations will lose about $600,000 in calendar year 1992 (pre-acquisition), we are confident that the product growth potential, coupled with our cost control strategies and economies of scale with Xscribe departments, will return Photomatrix to profitability. Our experiences in turning around Xscribe will contribute greatly to the Photomatrix effort." Dutia further stated, "We are pleased that we will be welcoming two representatives from the Wyly family to our board of directors, which will be expanded to seven members after the merger. In addition to their affiliation with Photomatrix, members of the Wyly family are principal stockholders of Sterling Software Inc. and Michaels Stores Inc. Their input to our board decisions will be invaluable." Sam Wyly said, "We are powerfully impressed by the management skills of the Xscribe management team in returning Xscribe to profits and growth. Substantial consolidation is going on in the image processing industry. As conversion is made to optical and digital technologies, we expect to see a small number of winners in a rapidly growing industry. We believe the combined Xscribe/Photomatrix will be one of them." Xscribe Corp. designs and markets high-technology software and hardware products for legal professionals, including computer-aided transcription systems for court reporters and real-time captioning systems for the hearing impaired. Xscribe's wholly owned subsidiary, U.S. Micro-Imaging Inc., provides micrographics services to a wide range of customers, including attorneys and financial institutions. Xscribe's newly formed subsidiary, U.S. Transcan Technologies Inc., develops, manufactures and sells document-handling and electronic- scanning products for electronic-imaging applications. -0- 1/27/93 /CONTACT: Bruce C. Myers, VP of operations and CFO of Xscribe, 619-457-5091, ext. 319/ (XSCR)
CO: Xscribe Corp.; Photomatrix Corp. ST: California IN: CPR SU: TNM
JB-LS -- SD002 -- 9485 01/27/93 09:30 EST
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|Date:||Jan 27, 1993|
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