2014

Sylogist to Acquire Epic Data International Ltd.

/THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./

CALGARY and VANCOUVER, May 8, 2013 /CNW/ - Sylogist Ltd. (TSXV:SYZ) ("Sylogist") and Epic Data International Ltd (TSXV:EKD) ("Epic Data"), are pleased to announce that they have entered into an agreement (the "Arrangement Agreement") pursuant to which Sylogist will acquire 100% of Epic Data's shares and, thereby, Epic Data's existing proprietary enterprise application software, all existing customer relationships, customer contracts, as well as its tax pools.  The transaction ("Transaction") will be effected by way of plan of arrangement under the Business Corporations Act (British Columbia).

Under the Transaction, Sylogist will pay CDN $5 million cash consideration (net of working capital adjustments) for Epic Data and will acquire all of the outstanding shares of Epic Data.  Epic Data has formed a new company, Epic Fusion Corp. ("Newco"), which will acquire Epic Data's business in China and be operated by Epic Data's current senior management.  In connection with the Transaction, Newco will receive the cash consideration payable by Sylogist, Epic Data's existing interests in China (including its ownership in Epic Data Systems (Shanghai) Co. Ltd. and Epic-Hust Technology (Wuhan) Co. Ltd.) and a perpetual license entitling it to use specific Epic Data software (known as IntegraMES, for use in manufacturing facility applications) in the Peoples' Republic of China ("PRC").  Under the terms of the license, Newco will agree not to compete with Epic Data in its current business outside the PRC.  Newco intends to seek a listing with the TSX Venture Exchange following completion of the Transaction.

In consideration of these asset transfers and perpetual license, Newco will assume Epic Data's outstanding loans and debentures and issue Newco shares to Epic Data.   Epic Data will in turn reorganize its share capital, such that upon completion of the Transaction Epic Data shareholders will receive Newco shares in the same proportion as their holdings of Epic Data.  Sylogist will acquire all of the outstanding common shares of Epic Data for nominal cash consideration, which cash consideration will not be distributed but will immediately be contributed to the stated capital of Newco.

"Epic Data is a well-recognized competitor to Sylogist in the enterprise application software field, with its manufacturing execution systems, data collection platform software, warehouse management application software and shop floor terminals, such as its recently unveiled UniView rugged tablet for mobile and shop floor applications.  This acquisition is highly strategic and synergistic, giving us expanding operations in Canada, the United States and Europe, the addition of Epic Data's Fortune 500 customer base to our own and a significantly enhanced technology platform.  Properly scaled, we foresee Epic Data, through its recurring revenue contracts, technology and tax pools, providing Sylogist with a material increase in financial performance commencing in the fourth quarter of fiscal 2013." stated Jim Wilson, Sylogist's President and CEO.

"We believe this strategic transaction with Sylogist presents a tremendous opportunity to realize value for our operations in North America and Europe, while allowing the spin-out company, Epic Fusion Corp., to focus on the exciting market opportunity for manufacturing technologies in China", commented Robert Nygren, President & CEO of Epic Data. "Epic Fusion will own a 51% interest in a joint venture set up with Huazhong University of Science & Technology early last year that has grown to over 130 staff. With projects also underway through another partner in China, Epic Fusion will be well-positioned to realize growth in this emerging market."

The Transaction is anticipated to close on July 1st 2013.  Closing of the Transaction is subject to, among other conditions, the approval of at least 66 2/3% of the shares voted at the Epic Data shareholder meeting, the approval of the Supreme Court of British Columbia, the receipt of all necessary regulatory and stock exchange approvals and satisfaction of certain other closing conditions which are customary in transactions of this nature.

It is expected that the Epic Data shareholder meeting will be held in late June, 2013 following the mailing of an information circular to its shareholders describing the Transaction.  The Arrangement Agreement provides customary non-solicitation provisions and Epic Data has agreed to pay Sylogist a termination fee in certain circumstances if the Transaction is not completed.

The directors of Sylogist and Epic Data have unanimously approved the Transaction.  Principal shareholders of Epic Data, collectively representing in aggregate approximately 52% of the issued and outstanding shares of Epic Data, have entered into support agreements with Sylogist in which they have agreed to vote their shares of Epic Data in favour of the Transaction.

Complete details of the Transaction are described in the Arrangement Agreement which will be made available on SEDAR.

About Sylogist

Sylogist is a technology innovation company which, through strategic acquisitions, investments and operations management, provides enterprise application software to public and private sector customers.

The Company's stock is traded on the TSX Venture Exchange under the symbol SYZ. Information about Sylogist can be found at http://www.sylogist.com.

About Epic Data International Inc.

Epic Data International Inc. has produced manufacturing execution and warehouse management solutions for nearly 40 years.  Epic Data solutions synchronize supply chain and production activities to achieve real-time visibility of manufacturing metrics that reduces cycle times and costs, optimizes production planning and control, and boosts quality and efficiency.  The solutions are easily implemented either by module or as a completely integrated solution suite across the global enterprise.  Customers include Beechcraft, Lockheed Martin, Bell Helicopter, Komatsu, Bombardier Learjet, CAE Inc., Kingfisher (B&Q) plc, Joy Mining Machinery, Cobham Defence Communications Ltd., GE Aircraft Engine, Contour Premium Aircraft Seating, McBride plc, Phoenix Contact, Rolls-Royce and Volvo.

Forward-looking Statements

This news release contains forward-looking statements relating to the future operations and profitability of the Corporation and other statements that are not historical facts. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expects", "believe", "will", "intends", "plans" and similar expressions. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. More particularly and without limitation, this press release contains forward-looking information concerning: the anticipated benefits of the Transaction to Epic, its shareholders, and Sylogist, including anticipated synergies and potential financing sources; the holding of the shareholder meeting of Epic; expected tax pools available to Sylogist, and; the closing of the Transaction.  Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Investors are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions.  In respect of the forward-looking information and statements concerning the anticipated benefits and completion of the proposed Transaction and the anticipated timing for completion of the Transaction, each of Sylogist and Epic has provided such in reliance on certain assumptions that it believes are reasonable at this time, including assumptions as to the ability of Epic to receive, in a timely manner, the necessary regulatory, court, shareholder, stock exchange and other third party approvals; the ability of each of Sylogist and Epic to satisfy, in a timely manner, the other conditions to the closing of the Transaction; and expectations and assumptions concerning, among other things: commodity prices and interest and foreign exchange rates; planned synergies, capital efficiencies and cost-savings; applicable tax laws; the sufficiency of budgeted capital expenditures in carrying out planned activities; the availability and cost of labour and services; the success of growth projects; future operating costs; that counterparties to material agreements will continue to perform in a timely manner; that there are no unforeseen events preventing the performance of contracts; and that there are no unforeseen material construction or other costs related to current growth projects or current operations..   The anticipated dates provided may change for a number of reasons, including unforeseen delays in preparing meeting materials, inability to secure necessary shareholder, regulatory, court or other third party approvals in the time assumed or the need for additional time to satisfy the other conditions to the completion of the Transaction.  Accordingly, readers should not place undue reliance on the forward-looking information contained in this press release.

Since forward-looking information addresses future events and conditions, such information by its very nature involves inherent risks and uncertainties.  Actual results could differ materially from those currently anticipated due to a number of factors and risks.  These include, but are not limited to the risks associated with the industries in which each of Sylogist and Epic operates in general such as: costs and expenses; commodity price, interest rate and exchange rate fluctuations; competition; failure to realize the anticipated benefits of the Transaction and to successfully integrate each of Sylogist and Epic; ability to access sufficient capital from internal and external sources; and changes in legislation, including but not limited to tax laws.  Risks and uncertainties inherent in the nature of the Transaction include the failure of Epic to obtain necessary shareholder, regulatory, court and other third party approvals, or to otherwise satisfy the conditions to the Transaction, in a timely manner, or at all.  Failure to so obtain such approvals, or the failure of each of Sylogist and Epic to otherwise satisfy the conditions to the Transaction, may result in the Transaction not being completed on the proposed terms, or at all.

Readers are cautioned that the foregoing list of factors is not exhaustive. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release, and neither Sylogist nor Epic undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by Canadian securities law.

This joint news release does not constitute an offer to sell or the solicitation of an offer to buy any securities within the United States. The securities to be offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act or other laws.

-Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release-

SOURCE Sylogist Ltd.




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