Advanced Communications Agrees to Acquire Controlling Interest in Pacific Magtron Transaction Will Be a Major Step in Creating New Vertically Integrated Technology Service Business
NEW YORK, Dec 10, 2004 /PRNewswire-FirstCall via COMTEX/ -- Advanced
Communications Technologies, Inc. (OTC Bulletin Board: ADVC), a holding company
with subsidiaries specializing in the repair of computers, peripherals and
consumer electronics, and Pacific Magtron International Corp. (OTC Bulletin
Board: PMIC), a California-based distributor and reseller of computer systems,
components, peripherals and software, announced today that Advanced
Communications has agreed to acquire a 62% interest in the outstanding common
stock of Pacific Magtron, pursuant to the terms of a stock purchase agreement
among Advanced Communications and Ted Li and Cynthia Lee, controlling
shareholders and executive officers of Pacific Magtron.
Under the terms of the agreement, Advanced Communications will purchase
6,454,300 shares of Pacific Magtron's common stock from Li and Lee at $0.077 per
share, for a total purchase price of $500,000 payable by Advanced
Communications' issuance of one-year promissory notes convertible into shares of
Advanced Communications.
The parties expect the acquisition to close within the next 30 days. Completion
of the transaction is subject to customary closing conditions, and to the
conclusion of certain arrangements currently being negotiated with holders of
the Series A Convertible Preferred Stock issued by Pacific Magtron, expected to
include some principal reduction as well as adjustments to the terms of the
convertible preferred stock. If the transaction closes on or before December 31,
2004, Advanced Communications would, on a consolidated basis, report
consolidated assets of approximately $22 million.
Li co-founded Pacific Magtron in 1990 and has been its CEO since 1995. He has
over 25 years of experience in the computer software and hardware arena and is
responsible for Pacific Magtron's operations, financial activities and technical
functions. Li will remain with Pacific Magtron as chief financial officer and
chief operating officer under a three-year employment agreement.
Lee, who co-founded Pacific Magtron with Li, has over 20 years of experience in
the computer manufacturer and reseller's marketplace and is responsible for
Pacific Magtron's sales and purchasing operations. Lee will remain with Pacific
Magtron as executive vice president under a two-year employment contract,
primarily focusing on product procurement and business development in the Asian
market and the Pacific Rim.
Wayne Danson, Advanced Communication's president and chief financial officer,
said, "This represents another constructive step toward Advanced Communications'
evolvement into a national vertically integrated service and technology
business. Pacific Magtron complements our technology repair business,
Cyber-Test, and this affiliation gives us the opportunity to improve our product
sourcing, expand our customer base and strengthen our logistics. We expect the
transaction will be accretive and will significantly strengthen our long-term
growth prospects."
Li said, "We believe this affiliation offers outstanding prospects for all
parties. We anticipate that it will broaden Pacific Magtron's opportunities for
its customers and shareholders, and present significant opportunities for
growth."
Lee added, "Building a stronger team is the way of the future. We believe that
becoming a strong teammate of the Advanced Communications group will help us to
strengthen our product offerings, provide additional resources and allow Pacific
Magtron to better serve its customers."
Martin Nielson, president and chief executive officer of Encompass Group
Affiliates, Advanced Communications' operating subsidiary, will assume the title
of president and chief executive officer of Pacific Magtron upon closing of the
stock purchase. Nielson said, "Pacific Magtron has had an excellent reputation
as a major multimedia and storage peripheral distributor in Silicon Valley since
its inception in 1990, has provided over 1,800 different microcomputer products
to over 8,000 system integrators in the United States and abroad. Plus, it has a
solid online reselling presence, livewarehouse.com, and a systems integration
business in Georgia. An affiliation with Pacific Magtron and access to its
network will give us a distribution engine that spans from East to West coast,
an Asian presence and an expanded services offering."
"We intend to aggressively implement commercial programs between the companies
to take full advantage of the synergistic opportunities, although Pacific
Magtron will continue to operate as a separate public company and its stock will
continue to trade on the over-the-counter bulletin board under the PMIC symbol
upon completion of the transaction. We believe both companies will realize the
expected commercial benefits and synergies of improved sales and profits, along
with a reduction of costs. So we think this acquisition perfectly serves our
stated expansion goals of becoming a leader in integrated technology and
service," Nielson said.
In connection with the transaction, Pacific Magtron also announced that it has
hired Rick Martin as executive vice president in charge of strategic business
development and marketing. Martin has over 25 years of experience in product
management, marketing, and distribution channel development with such companies
as Compaq Computer, BusinessLand and Gap Stores. Most recently, Martin served as
chairman and chief executive officer of Positive Communications, a privately
held national wireless services provider.
About Pacific Magtron International Corp.
Pacific Magtron International Corp., based in Milpitas, Calif., is a publicly
traded distributor, e-commerce reseller and system/solution provider of a wide
range of systems, hardware components and software with a strong growth of
online sales. Its customer base includes a wide spectrum of technology-based
suppliers to the consumer, corporate, educational and government markets.
Pacific Magtron offers over 1,800 different computer products from more than 50
vendors including a line of peripherals sold under its trademarked "EZ-Media"
brand name. It has long-standing relationships with many of the industry's most
recognizable and innovative computer peripheral manufacturers, including
Microsoft, Sony, Plextor, Creative Labs, Adaptec, ATI, Kingston and Logitech,
among others. Pacific Magtron also maintains and operates a system integration
facility located in Norcross, Georgia. For more information, visit Pacific
Magtron's website at www.pacificmagtron.com
About Advanced Communications Technologies, Inc.
Advanced Communications Technologies, Inc. is a New York City-based public
holding company that, through its wholly owned subsidiary and principal
operating unit Encompass Group Affiliates, Inc., owns Cyber-Test, Inc., an
established electronic equipment repair company based in Longwood, Fla. Through
its wholly owned investment subsidiary Hudson Street Investments, Inc., Advanced
Communications also owns a minority interest in Yorkville Advisors Management,
LLC, an investment management partnership. For more information, visit Advanced
Communications' website at www.advancedcomtech.net
A profile for investors on Advanced Communications may be found at the website
www.hawkassociates.com/advancedcommunications/profile.htm
An online investor kit containing Advanced Communications' press releases, SEC
filings, current price Level II quotes, interactive Java stock charts and other
useful information for investors can be found at www.hawkassociates.com
and www.hawkmicrocaps.com
This release and oral statements made from time to time by the Company's
representatives concerning the same subject matter may contain "forward looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements can be identified by introductory words such as
"expects," "plans," "intends," "believes," "will," "estimates," "forecasts,"
"projects" or words of similar meaning, and by the fact that they do not relate
strictly to historical or current facts. Many factors may cause actual results
to differ from forward-looking statements, including inaccurate assumptions and
a broad variety of risks and uncertainties, some of which are known and others
of which are not. Known risks and uncertainties include those identified from
time to time in the reports filed by the Company with the Securities and
Exchange Commission, which should be considered together with any forward
looking statement. No forward looking statement is a guarantee of future results
or events, and one should avoid placing undue reliance on such statements.