New Visual Signs Letter of Intent to Acquire Hytek Services
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SAN DIEGO--(BUSINESS WIRE)--Oct. 2, 2001--
Silicon Valley Circuit Board Design Firm to Facilitate the Development of New Visual's Broadband Transmission Technology -- Adds Growing Base
of Revenue and Additional Management Expertise
New Visual Corp. (OTCBB:NVEI) today announced that the company has signed a letter of intent to acquire Hytek Services, a privately held firm located in Santa Clara, Calif.
Founded in 1993, Hytek specializes in the design and fabrication of printed circuit boards and in the sale and service of electronic design automation tools. With a staff of 30 specialists, Hytek also has offices in Redmond, Wash. and San Diego.
Hytek Services has grown into one of the leading printed circuit board design firms in Silicon Valley with many high profile customers, primarily in the networking and telecommunications industry, such as Alcatel, Intel, Cisco Systems, Altera and Calient Networks. Hytek's annual sales have grown steadily. In 2000, the firm's sales exceeded $8.5 million, and its earnings before interest, taxes, depreciation and amortization were over $2 million. Current sales are on pace to exceed that for 2001. Hytek intends to expand its regionalized business model following the acquisition.
"We are thrilled with the opportunity to facilitate both the development and the technical servicing of products utilizing New Visual's advanced technology, while expanding Hytek into new markets," said Dave Linebaugh, one of the three original founders. "To have the opportunity to work with the world class group of scientists and advisors associated with New Visual and its management, and also be able to participate in the upward potential of the company is extremely attractive to us," he continued. The parties anticipate that Hytek's employees will continue with the company after the acquisition. The three founders of Hytek also will continue their employment with the company.
The terms of the agreement stipulate a total purchase price of $5 million. $2.5 million of the purchase price will be paid in cash, $2 million will be in the form of a convertible note, and the remaining $500,000 will be in New Visual's common stock, which will be valued at the closing of the transaction. The closing of the transaction is subject to various conditions including the completion of due diligence by both parties, and the negotiation and approval by both parties of a definitive agreement, and New Visual securing financing of the cash portion of the purchase price. The company anticipates closing will occur by year-end.
Ray Willenberg Jr., president and CEO of New Visual Corp., said, "This synergistic acquisition will further enhance our efforts to commercialize our technology. Hytek's proven ability to design quality products with a focus on profitability adds greatly to our growing and talented enterprise. Additionally, the management and employees of Hytek add strategic leadership in outsource manufacturing to our planned offering of broadband technology to the telecommunications industry."
About New Visual
New Visual Corp. is pioneering the development of a proprietary broadband transmission technology with the mission to utilize existing copper telecommunications infrastructure to deliver data and content to the office or home at fiber optic transfer rates. Through its NV Technology Inc. subsidiary, New Visual is developing technology that will allow the bundling of voice, video, and data over existing copper telephone wires, potentially eliminating the need for fiber optic cable to the home or office. New Visual's common stock is traded on the Over-The-Counter Bulletin Board under the symbol NVEI.
With the exception of historical information contained in this press release, this press release includes forward-looking statements made under the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, including but not limited to the following: product development difficulties; market demand and acceptance of products; the impact of changing economic conditions; business conditions in the Internet and telecommunications industries; reliance on third parties, including potential suppliers, licensors, and licensees; the impact of competitors and their products; risks concerning future technology; and other factors detailed in this press release and in the company's Securities and Exchange Commission filings.
CONTACT: New Visual, San Diego
Rich Wilson (Media) / John Howell (Investor)
619/692-0333
or
Fleishman-Hillard for New Visual
Bridget Stachowski (Media)
619/237-7717
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