VantagePoint Enters Folding Carton Market with Strategic Acquisition
Press release from the issuing company
Purchase of Avalon opens European market and doubles marketplace
VANCOUVER, May 27 -- VantagePoint Systems a developer of business management software for the corrugated packaging industry, announced that it has entered into an agreement to acquire Avalon Printing Software, Ltd. of Leicester, UK.
Avalon develops and markets business management software for the folding carton, flexible packaging, and label industries, including advanced estimating and scheduling software. Founded in 1999, Avalon's software solutions operate in over 30 manufacturing plants worldwide. Avalon's customers include Smurfit-Stone, International Paper, Carter Holt Harvey, Hub Folding Box, and Los Angeles Paper Box. Avalon reported C $1.3 million audited consolidated revenues for fiscal 2001.
"The acquisition of Avalon is a strategic move for VantagePoint," said Jim Hennings, chairman and CEO at VantagePoint. "It instantly provides us with a European presence via the UK-based development and customer support center, and business office. It enables us to rapidly enter the US $100 billion folding carton and flexible packaging market through the acquisition of existing software. Finally, the acquisition provides VantagePoint with an increased customer base and team of software professionals with extensive packaging industry expertise."
Avalon will operate as a wholly owned subsidiary of VantagePoint Systems, Inc. VantagePoint will continue operating from Avalon's current facilities in Leicester. Andrew Armitage, founder, president and CEO of Avalon, will head the newly-established retail packaging division within VantagePoint, and all current staff will be retained.
In consideration for all outstanding shares of Avalon, VantagePoint will issue 500,000 common shares and will make payments totaling US $200,000 over a 24-month period. In addition, VantagePoint has agreed to pay a performance- based earn out dependent on Avalon reaching minimum revenue and profit criteria over the next 24 months. This earn-out is not to exceed US $600,000 and will be paid in either cash or stock, at the option of VantagePoint. VantagePoint will also grant options to Avalon's officers and employees to purchase up to 300,000 shares at C $0.50 per share for a period of five years. Closing of the acquisition is conditional upon TSX Venture Exchange acceptance.
"Avalon's proven software solutions for retail and consumer packaging will naturally complement VantagePoint's software solutions for corrugated container manufacturers," said Andrew Armitage, president and CEO of Avalon. "VantagePoint has North American presence while Avalon has European presence. Together, our combined software and professional services offerings will allow us to implement advanced global software solutions for virtually any packaging manufacturing operation."
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