(Applies to: CHEL)
Chell Acquisition Corp signs agreement to buy all outstanding shares of
Logicorp
Chell Group Corporation would triple its revenues with acquisition of
profitable system integrator
LAGUNA BEACH, CA, Jul 17, 2001 /PRNewswire via COMTEX/ -- CHELL ACQUISITION
CORP, a private company owned by Cameron Chell, Chairman and CEO of CHELL GROUP
CORPORATION (NASDAQ:CHEL) is pleased to announce that it has signed a Letter of
Intent to purchase all of the outstanding shares of the Logicorp Group of
Companies. Logicorp is a regional system integrator with the foundation and
ability to deliver and grow into a North American system integrator and
Information Technology services provider. Logicorp had net earnings of $1
million (all numbers in US dollars) on revenue of $35.9 million for its year
ended June 30, 2000. Revenues for June 30, 2001 are anticipated to be
approximately $40 million with EBITDA of $1 million and net earnings of
$600,000. Chell Acquisition Corp has also agreed to allow Chell Group
Corporation (NASDAQ: CHEL) to assume Chell Acquisition Corp's position in the
acquisition of Logicorp set to close August 30, 2001.
The purchase price for Logicorp will be $8.0 million, to be paid in a
combination of cash and Chell Group Corporation common stock, with a performance
earn-out based on EBITDA levels.
"Not only is this transaction immediately accretive but it also provides the
critical mass and fundamental platform to launch additional acquisitions. We
believe that significant synergies exist between Logicorp and Chell, and
anticipate being able to increase the top lines, bottom lines and the margin of
both Logicorp and Chell. One of the main reasons we are so keen on this space,
and Logicorp in particular, is their deep knowledge of the service provider
channel requirements as well as their profitable and growing business model. We
believe we have the skills to quickly and efficiently deploy new technologies
within any organization we acquire, becoming a powerful competitive advantage
for us in our acquisition program," said Cameron Chell.
Fred Johannesen, of Logicorp, said "My partners and I are impressed with the
direction Chell is going. There are some great immediate synergies and we see
this as an opportunity to take our business to the next level and contribute to
Chell's success in the future at the same time." "We are very excited about
working with Cameron and his team to build something very special, " said
Johannesen.
"Logicorp is the logical next step for Chell. I look forward to working with
Cameron and the Board to execute on its well thought out plan to strategically
build a technology powerhouse serving the IT distribution channel and the
Service Provider Network." said Shelly Singhal, newly appointed board member of
Chell Group Corporation and Managing director, SBI E2-Capital (USA) Inc.,
Softbank Investment Group Japan's new US investment banking arm
About Chell Group Corporation
Chell Group Corporation (NASDAQ: CHEL) is a technology Buyout firm in the
business of acquiring and transforming new and existing businesses by applying
new direction, management infrastructure and technology platforms. Its goal is
to acquire, transform and build businesses to compete and dominate significant
marketplaces, creating wealth for Chell shareholders. The current Chell
portfolio of companies includes: Engyro Inc. www.engyro.com, cDemo Inc.
www.cdemo.com , NTN Interactive Network Inc. www.ntnc.com , Magic Lantern
Communications Ltd. www.magiclantern.ca / www.tutorbuddy.com and GalaVu
Entertainment Network Inc. www.galavu.com . For more information on the Chell
Group, visit at www.chell.com.
About Logicorp
Logicorp is a leading Canadian IT systems integrator handling all aspects of IT
systems integration and solutions development, including application and network
integration, desktop support, hardware/software procurement, systems
architecture design and consulting. Logicorp is also the No. 2 reseller in
Canada of Citrix software, the dominant operating system platform for the online
software/ASP industry. The website for Logicorp is: www.logicorp.ca
Forward-looking statements and comments in this press release are made pursuant
to safe harbor provisions of the Securities Exchange Act of 1934. Certain
statements that describe The Chell Group Corporation's intentions, expectations
or predictions, are forward-looking and are subject to important risks and
uncertainties. The results or events predicted in these statements may differ
materially from actual results or events. Factors which could cause results or
events to differ from current expectations include, among other things: the
acceptance of Internet based application service providers in the consumer
market; the impact of rapid technological and market change; general industry
and market conditions and growth rates.
SOURCE Chell Merchant Capital Group
CONTACT: Ron Matthews, Manager, Strategic Banking Services, Chell Group
Corporation, 1-877-446-8231, rmatthews@chell.com; Arian L. Hopkins,
Manager, Corporate Communications, Chell Group Corporation, 1-877-252-7771,
arian@chell.com
(CHEL)
http://www.prnewswire.com
Copyright (C) 2001 PR Newswire. All rights reserved.
-0-
KEYWORD: California
SUBJECT CODE: TNM
STOCK SYMBOLS: [(chel)]
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