MARKHAM, Ontario--(BUSINESS WIRE)--March 4, 1996--Legacy Storage Systems International Inc. announced today that the Bankruptcy Court 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 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 and Europe. Meanwhile, Legacy will concentrate on expanding sales of its breakthrough VAST HSS mass storage system."
"We will now have access to more than 100 additional channel partners including Merisel, Ingram Micro 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 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 of Legacy in the principal amount of U.S. $4,250,000;
c) the assumption of certain Rexon debtor in possession financing in an amount not to exceed U.S. $2,100,000;
d) the conversion of U.S. $2,000,000 of debtor in possession financing provided by Legacy to Rexon into common shares of Rexon; and
e) U.S. $100,000 payment in cash and the assumption by Legacy of certain executory contracts and unexpired leases.
Net proceeds 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 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
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