Hemisphere GPS Sells Non-Agricultural Operations for $15M, Plans Name Change to "AgJunction"
Sale and name change support new Ag focus
Alliance with buyer reinforces technology leadership
HIAWATHA, KS, Jan. 31, 2013 /PRNewswire/ - (TSX: HEM) Hemisphere GPS Inc. ("the Company" or Hemisphere GPS) today signed and closed a definitive agreement to sell the business assets associated with its non-agricultural operations to the Canadian subsidiary of Beijing UniStrong Science & Technology Co. Ltd. ("UniStrong") for cash of $14.96M. PI Financial Inc. acted as advisor on the transaction for Hemisphere GPS. The Company also announced that it plans to change its corporate name to "AgJunction Inc." subject to shareholder approval at its 2012 annual shareholders meeting, planned for May 2013.
Hemisphere GPS' non-agricultural operations include the Company's Precision Products portfolio and related infrastructure. The Precision Products segment generated revenues of approximately $13.3 million in 2012 serving marine, land survey, construction, mapping, and OEM segments.
"The decision to divest our non-agriculture operations reflects our focus on the core platforms necessary to extend our leadership in precision agriculture," said Rick Heiniger, President and CEO of Hemisphere GPS. "The result is a streamlined business which can more effectively capitalize on the expanding market opportunities in agriculture."
Included in the sale are the intellectual property rights associated with the non-agricultural operations necessary to support the continued growth of those operations globally, including trademarks associated with the "Hemisphere GPS" identity. UniStrong intends to name the acquired operations "Hemisphere GNSS Inc.". The Hemisphere GPS brand was not part of the Company's agriculture identity.
As part of the transaction, UniStrong and Hemisphere GPS have formed a strategic alliance and a collaborative business relationship covering supply chain management, customer support, non-competition, and perpetual technology cross-licensing.
"Already having an established relationship with UniStrong as one of our resellers made our alliance a win-win for both parties," stated Mr. Heiniger. "I am very pleased to be working together in this close technology-sharing relationship."
The Company's existing agricultural business has not been interrupted during this process and the Company reports that ag-related revenues have increased year-to-date. The Company's new Outback MAX™ product integrated with AgJunction has had a positive reception in the marketplace.
Corporate Name Change to "AgJunction"
The re-branding of the Company as "AgJunction" is an integral part of the strategic re-focusing of the Company's resources on the significant opportunities in precision agriculture, and part of the restructuring initiated in September, 2012. The Company maintains ownership of its key patents and leading agricultural brands including AgJunction®, Outback Guidance®, and Satloc®, which are among the most recognized names in precision agriculture.
AgJunction will retain its listing on the Toronto Stock Exchange. Coinciding with the name change, the Company plans to change its ticker symbol from "HEM" to "AJX" shortly after the shareholders meeting, subject to shareholder and TSX approval. An announcement will precede the commencement of trading under the new symbol and will formally introduce the Company's new corporate identity.
As part of the previously announced restructuring plan, the Company has completed the transition of its Calgary-based manufacturing activities to its external manufacturing partner, and is closing its Calgary-based manufacturing activities effective today. The transition of the Company's head office to Hiawatha, Kansas continues, and the Calgary location will be officially closed on May 31, 2013. Other progress on restructuring activities has been positive and costs associated with the restructuring are expected to come in below previously announced estimates. The Company does not require additional capital to complete the restructuring.
Upon completion, savings from the overall restructuring are estimated to be approximately $7 million per annum through reduced manufacturing costs, improved gross margins and reduced operating overhead.
A further corporate update will be provided in February, 2013.
Beijing Unistrong Science and Technology Co., Ltd is listed on the Shenzen Stock Exchange under ticker 002383.
Hemisphere GPS (to be renamed "AgJunction" following shareholder and TSX approval) designs and manufactures innovative, cost-effective products for positioning, guidance, and machine control applications in agriculture. The Company holds numerous patents and other intellectual property and owns several leading brand names, including AgJunction® and Outback Guidance®, leading brands in precision agriculture. The Company is headquartered in Hiawatha, Kansas, with product development, sales, and marketing facilities in Arizona, and Australia. Hemisphere GPS is listed on the Toronto Stock Exchange (TSX) trading under the symbol "HEM" and is one of the TSX Cleantech designated companies. For more information about Hemisphere GPS, please go to www.agjunction.com.
Certain statements contained in this press release constitute forward-looking statements. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "potential", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. In particular, this press release contains forward-looking statements pertaining to, but not limited to, the Company's plans to change its name and trading symbol and the anticipated timing thereof, the results and expected benefits to the Company from the sale of the Company's non-agriculture operations, the anticipated name of the acquired operations, expected costs associated with the restructuring, and estimated savings from the overall restructuring as a result of reduced manufacturing costs, improved gross margins and reduced operating overhead, These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond Hemisphere GPS' control, including, but not limited to: the impact of general economic conditions, industry conditions, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations, failure to achieve the anticipated benefits from the sale of the Company's non-agriculture operations, failure to obtain shareholder approval for the change of the Company's name on the timelines anticipated or at all, and obtaining required approvals of regulatory authorities. With respect to forward-looking statements contained in this press release assumptions have been made regarding, among other things: future technological developments, availability of key supplies, components, services, networks and developments, future exchange rates, the impact of increasing competition, the continuity of existing business relationships, conditions in general economic and financial markets, availability of skilled labour, and ability to obtain required shareholder and regulatory approvals. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceed, that the Company will derive therefrom. The forward-looking statements contained in this press release are made as of the date of this press release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE Hemisphere GPS Inc.