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NOVEKO ECHOGRAPHS INC. signs a Letter of Intent for a New Acquisition
14:04 EST Friday, December 09, 2005
MONTREAL, Dec. 9 /CNW Telbec/ - NOVEKO ECHOGRAPHS INC. ("Noveko" or the "Company") (TSX Venture Exchange: EKO) announces that it has executed a Letter of Intent with Mr. Alain Bolduc, Lapjack (Canada) Ltd. ("Lapjack") and its wholly-owned subsidiary Bolduc Leroux Inc. ("BLI"), pursuant to which Noveko has indicated its intention to purchase all the issued and outstanding shares of Lapjack, all of which are held by Mr. Alain Bolduc. The proposed purchase price is of a maximum of $4,000,000, payable by $500,000 in cash and by the issue of 7,000,000 Units, each Unit being composed of one (1) Class A Share and one fifth (1/5) of a Warrant, each whole Warrant giving the right to its holder to subscribe one (1) Class A Share of Noveko, at a subscription price of $1.00 per share, for a period of 24 months following the closing of the acquisition.
Taking into consideration the characteristics of this transaction, and the fact that Mr. André Leroux, President and Chief Executive Officer of the Company, is also director and vice-president of BLI, the transaction is subject to acceptance by the TSX Venture Exchange and approval by the disinterested shareholders of the Company at a Special General Meeting of the Shareholders to be held on or about February 15, 2006.
According to Mr. André Leroux: "Should the transaction close, this acquisition would add sales of approximately $6 million on an annualized basis to Noveko's revenues and would immediately contribute to its earnings. This acquisition is in line with our objective of increasing Noveko's growth potential and shareholder value. Last year's acquisition of ECM greatly enhanced our expertise and our technological portfolio in ultrasonography for veterinary medicine. We have, since then, examined various acquisition projects in the ultrasonography field, but none to date have been in line with our growth objectives. We continue to remain on the lookout for acquisitions in this sector. In the interim, the opportunity to purchase BLI has surfaced. It is a dynamic and profitable company specializing in steel distribution and processing which has the potential to eventually develop a bio-medical business given that it holds a patent for an antibacterial filtration technology, obtained in October 2005."
BLI has achieved strong growth in recent years subsequent to a broadening of its operations which have since been focused primarily on distribution and processing steel products for customers in the oil and gas, mining, and windmill industries as well as other business sectors. "BLI benefits from a solid order backlog, possesses production capabilities to meet demand and retains attractive growth potential. Furthermore, we are proud to have obtained a U.S. patent, pending to become worldwide, titled "microbicidal air filter and mask", for the antibacterial filtration technology. This technology can be used to produce filters and masks that can be washed up to 100 times without losing their antibacterial property. It can also be used to design conventional masks such as the N-95, without changing current processes. Our technology has been tested by North American, French, Swiss and Chinese laboratories, which have all confirmed its unique capacity to filter and eliminate 100% of the tested bacteria, molds, yeasts and viruses." added Mr. Alain Bolduc, president of BLI.
Completion of the transaction is subject to a number of conditions, mainly: (i) a complete and satisfactory due diligence of Lapjack and BLI, (ii) the acceptance of the TSX Venture Exchange, (iii) the approval of the transaction by the disinterested Shareholders at a Special General Meeting, (iv) an independent valuation of the value of the shares of Lapjack to be acquired (v) the approval of the Company's lenders, including the Debentureholders, (vi) the obtaining by Noveko of financial resources (equity or debt) that Noveko will consider appropriate to complete, at its satisfaction, such a transaction without harming its current activities, (vii) the Company shall be entirely satisfied that BLI holds the patent referred to above, be satisfied of its scope, and that no claim or suit is pending or threatened in connection with its validity and that such patent does not infringe any third-party rights, and (viii) the signing of non-competition and employment agreements with Mr. Alain Bolduc.
The transaction cannot close until the required Shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon.
The TSX Venture Exchange has not, in any way, passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
A Management Information Circular in connection with the Special General Meeting will be sent to the shareholders after completion of the audited financial statements and pro forma financial statements, including those of Lapjack, required under the applicable regulation.
Profile of NOVEKO
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Noveko and its French subsidiary ECM currently specialize in the design and marketing of portable real-time ultrasound scanners for use in veterinary medicine and animal breeding, as well as in human medicine. The Company's devices are notably used to improve breeders' yield by facilitating the diagnosis of animal pathologies, the monitoring of gestation and the evaluation of the animals' back and intramuscular (marbling) fat content to optimize meat quality. Noveko has also developed a portable ultrasound technology for human applications including cardiovascular, gynecological, abdominal, organ and prostate examinations, which offers considerable potential in regard to ambulatory medicine and health care in developing countries. In addition to its products' innovative features and excellent quality/price value, the Company's main differentiating advantage in ultrasonography lies in the fact that all its scanners are portable, user- friendly and battery-powered, so they can be used both in clinics and in the field. Noveko thereby positions itself in specific market niches, including some developing countries, where major competitors are absent. Operating since September 2002, Noveko was listed on the TSX Venture Exchange on February 3, 2004.
The information set forth in this press release includes certain forward-looking statements. Such statements are based on assumptions exposed to major risks and uncertainties. Although Noveko deems the expectations reflected in these forward-looking statements to be reasonable, the Company cannot provide any guarantee as to the materialization of the expectations reflected in these forward-looking statements. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
The Annual General and Special Meeting of Shareholders of Noveko pertaining to the fiscal year ended June 30, 2005 will be held, as previously announced, on Monday, December 12, 2005, at the Omni Mont-Royal Hotel, Montreal at 10:00 AM.
For further information: André Leroux, President and Chief Executive Officer; Léon Assayag, CA, Chief Financial Officer, (514) 344-3030, www.noveko.com