Montreal, June 21, 2022– ATW Tech Inc. (the “Company” or “ATW”) (TSX-V: ATW) is pleased to announce the signing of two letters of intent to acquire complementary technology companies (individually the “Target” and jointly the “Targets”) in the fields of business intelligence, data analytics and public safety softwares powered by artificial intelligence (AI) (individually the “Transaction” and jointly the “Transactions”). For commercial and confidentiality reasons, ATW will disclose the name of the Targets only once definitive agreements have been reached.
The first Target is a renowned IT company that develops, markets and deploys public safety softwares powered by advanced decision aid tools. With over 60 employees and one of the most integrated emergency response system, the Target is an important player in the public safety industry worldwide. “The public safety sector is benefitting from massive economic tailwinds and is a high-value vertical targeted by ATW. We see a great opportunity to capitalize on our existing machine learning expertise to push the Target’s softwares even further by integrating greater AI into it,” said Michel Guay, President and CEO of ATW Tech. The Target’s global presence and complementarity will be leveraged by ATW entities to expand its reach to new international markets.
The base purchase price payable for the Acquisition is $8,500,000 (the “Purchase Price”), consisting of a combination of (i) $4,750,000 in cash, minus the debt, and a Balance of the purchase price payable on the achievement of certain objectives and (ii) $2,250,000 in common shares of ATW (“Shares“) at a price to be based on the average trading price of the Shares on the TSX Venture Exchange (“TSX”) for the 15 trading days immediately preceding the closing date, subject to the minimum price permitted under the policies of the TSX. The Purchase Price is subject to customary post-closing adjustments for working capital, transaction expenses and net debt. The first Transaction and the Purchase Price also remain subject to due diligence acceptable by ATW. This Transaction is at arm’s length and no finder’s fee is expected to be paid by ATW in connection with the Transaction.
The second target offers data analytics tools and expert consulting services to help clients drive business transformation through sophisticated data strategies. Fueled by strong management, more than 15 seasoned employees and tailored analytics solutions, the Target helps clients fast-track their data initiatives and drive tangible value in the fields of public safety, finance, retail and more. “Combining the Target’s solutions with ATW’s current offering opens up the tremendous opportunity to create the ultimate applicative AI toolbox that will support clients in valorizing their data at scale”, said Michel Guay.
The base purchase price payable for the Acquisition is $2,600,000, consisting of a combination of (i) $1,600,000 in cash, minus the debt and (ii) $1,000,000 in Shares of ATW at a price to be based on the average trading price of the Shares on the TSX Venture Exchange for the 15 trading days immediately preceding the closing date, subject to the minimum price permitted under the policies of the TSX. The Purchase Price is subject to customary post-closing adjustments for working capital, transaction expenses and net debt. This second Transaction and the Purchase Price also remain subject to due diligence acceptable by ATW. This Transaction is at arm’s length and no finder’s fee is expected to be paid by ATW in connection with the Transaction.
Michel Guay declared: “The most significant impacts of these two acquisitions is that they support our strategic plan, which is to develop a comprehensive suite of AI solutions to valorize data at scale, while maximizing cross-selling synergies within ATW. These acquisitions support our commitment to create shareholder value through high recurrence of revenues, the opening of new international markets and added AI expertise to ATW’s renowned knowledge center”.
The Transactions should be concluded no later than October 31, 2022; they are subject to a certain number of closing conditions, in particular the completion of the Private Placement (defined below) and the approval of the TSX-V Venture Exchange.
The cash portion of the Purchase Price will be financed by a simultaneous private placement for a maximum amount of $ 10,000,000 (the “Private Placement”). The precise terms of this Private Placement will be set out in a future press release.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this release.
ATW TECH PROFILE
ATW Tech is a technology company, owner of several recognized technology platforms such as Semeon Analytics, Option.vote and Voxtel. Semeon is a highly accurate and flexible text analysis platform for customer reviews and uses a unique combination of machine learning and natural language processing (NLP) to discover significant trends in customer reviews across all channels. Option.vote offers a customized multimethod voting system for unions, political parties, professional associations, and anyone looking for a secure way to reduce their voting costs and improve their participation rate. VoxTel specializes in telephone billing and alternative payment solutions for fixed and mobile lines.
Forward-Looking Statements and Disclaimer
Certain statements in this press release may be forward-looking. These statements include those relating to the Transactions, the closing date of the Transactions, the potential impact of the acquisitions on the Company, the ability of the Company to raise funds in connection with the private placement and the use of the proceeds raised in connection with said private placement. Although the Company believes that such forward‑looking statements reflect expectations based on reasonable assumptions, it cannot guarantee that its expectations will be realized. These assumptions, which may prove to be inaccurate, include, but are not limited to, the following:
(i) All the conditions of the transactions will be met. In particular, ATW will perform satisfactory due diligence on the Targets’ operations, finances, legal status and other matters; (ii) ATW and the Targets’ shareholders will be able to negotiate and conclude a purchase agreement and other documents related to the transaction; (iii) ATW will obtain the necessary regulatory approvals for the acquisition of the Targets on commercially reasonable terms; (iv) The acquisition of the Targets will enable ATW to realize the anticipated synergies; (v) ATW’s officers will not set or achieve any other strategic objectives using the proceeds of the Private Placement. The factors that may affect the achievement of the expected results include (i) The discovery in the due diligence process of elements unfavorable to the Target that would prevent ATW from proceeding with the purchase; (ii) The failure of negotiations between the parties with respect to final documentation; (iii) The Company’s inability to realize the anticipated synergies for any reason or due to technical issues that prevent the integration of the Targets’ systems with those of ATW; (iv) The Company’s inability to effectively use the proceeds of the private placement; (v) The Company’s inability to obtain the regulatory approvals necessary for the acquisitions or the private placement; (vi) Labor disputes or the occurrence of similar risks; (vii) ) a deterioration in the financial market conditions that prevent the Company from raising the required funds in a timely manner, and (viii) the Company’s inability to develop and implement a business plan in general and for any reason whatsoever. A description of the risks affecting the Company’s business and activities appears under the heading “Risks and Uncertainties” on pages 10 and 11 of ATW’s 2022 annual management’s discussion and analysis, which is available on SEDAR at www.sedar.com. No assurance can be given that any events anticipated by the forward-looking information in this press release will transpire or occur, or if any of them do, the benefits that ATW will derive therefrom. In particular, no assurance can be given as to the future financial performance of ATW. ATW disclaims any intention or obligation to update or revise any forward-looking statements in order to account for any new information or any other event. The reader is warned against undue reliance on these forward-looking statements.
Additional information regarding ATW Tech is available on SEDAR www.sedar.com