RDM Corporation announced that Xign Corporation has signed an agreement
to sell
Xign to JP Morgan Chase Bank, N.A. Upon completion of the transaction RDM
expects to receive net cash proceeds of approximately $9.0 million ($7.95
million U.S.). In addition, RDM may receive additional proceeds of up to
$1.2 million ($1.05 million U.S.) which are being held in escrow for a one
year period from the closing date. The amount received from escrow is
impacted by a number of items including the final purchase price
adjustments.
The closing of the transaction is subject to shareholder approval, U.S.
regulatory approval and customary closing conditions, and is expected to
occur within RDM’s current fiscal year which ends September 30, 2007. Upon
closing RDM expects to record a one-time after-tax gain of approximately
$2.6 million to $3.8 million, or $0.12 to $0.18 per share depending on the
escrow amount. There are no tax consequences of the sale given the tax
basis of the investment. All figures are quoted in Canadian dollars based
on current exchange rates unless otherwise stated.
Other than the one-time gain and cash infusion, the sale of Xign will
have no impact on RDM’s operations or reported financial results. Following
the closing there will be no ongoing affiliation between RDM and Xign, and
no director or employee of RDM will have any direct or indirect interest in
Xign.
“This transaction will benefit RDM by enabling us to more effectively
redeploy capital to growth opportunities,” said Douglas Newman, President
and CEO of RDM Corporation.
About RDM Corporation
RDM Corporation is headquartered in Waterloo, Ontario and trades on the
Toronto Stock Exchange under the symbol RC. RDM is a leading provider of
specialized software and hardware products for electronic payment
processing. RDM has pioneered electronic check conversion systems and
web-based image and transaction management services for banks, retailers,
payment processors and government agencies. RDM’s Image & Transaction
Management System (ITMS) is an industry leading e-check processing
solution whereby transaction information can be remotely captured and
processed electronically from distributed locations, freeing up significant
customer float time and significantly reducing costs associated with
returned checks.
