Posted on December 20, 2010
Ottawa, ON – December 20, 2010 – – International Datacasting Corporation (TSX: IDC) (“IDC” or the “Company”), a global leader in advanced solutions for the distribution of broadband multimedia content, announces the launch of a Business Acquisitions Strategy to be headed by Adam E. Adamou, Executive Chairman. Mr. Adamou will become a full-time employee of International Datacasting Corporation with responsibility for the allocation of the Company’s capital reserves: including investments in organic growth initiatives, tuck-in acquisitions and platform acquisitions.
“Our business model consists of building, managing and growing our operations profitably across the spectrum of opportunities in the broadband multimedia and adjacent sectors. We are building a capital allocation model and a rigorous due diligence process that defines, assesses and measures the risk adjusted return on our invested capital across all areas of our business,” said Adam E. Adamou. “We believe that it is a good time to be a well capitalized buyer in our sectors of interest, and we have the discipline, the knowledge and the skill to build, manage and grow our businesses considerably over the next decade.”
Adam Adamou is one of the foremost technology experts in Canada with over 20 years of extensive venture capital and capital markets experience. Mr. Adamou was involved as a lead investor in some of the most successful technology companies in Canada including Research in Motion Limited (RIMM) and SXC Health Solutions Inc. (SXCI), along with investment banking and mergers & acquisitions experience in technology related transactions across North America. A newly formed Investment Committee of the Board has been established to provide oversight on IDC’s Business Acquisition Strategy. The IDC Investment Committee will be composed of James W. Hall, Frank Ruffolo and Adam Adamou. Mr. Hall and Mr. Ruffolo both have extensive investment, venture capital and mergers & acquisitions experience.
The Business Acquisitions Strategy will run alongside IDC’s Strategic Planning Committee, chaired by Del Lippert (a director of IDC) and including IDC President & CEO Fred Godard (also a director) who will be overseeing a strategic review of IDC’s current operations and identifying trends and opportunities for additional growth.
To better tie Mr. Adamou’s expanded role with IDC to the creation of shareholder value, IDC’s Board of Directors has approved the sale of 2,000,000 IDC shares to Mr. Adamou at a price of $0.276 per share for an aggregate purchase price of $552,000. This transaction was priced within the context of the market at the time at which the arrangement was approved by the directors, in accordance with the rules of the Toronto Stock Exchange applicable to private placements, with no discount from the market price. IDC will facilitate Mr. Adamou’s purchase of IDC shares by providing an interest free loan to Mr. Adamou in the amount of the aggregate purchase price. The loan will be secured by a pledge of 3,000,000 shares of IDC, consisting of the 2,000,000 shares issued as a result of this transaction plus an additional 1,000,000 shares already held by Mr. Adamou. In accordance with the requirements of the Toronto Stock Exchange, the 2,000,000 shares issued pursuant to the transaction will be held in escrow and cannot be traded or voted pending shareholder approval of the transaction at IDC’s next shareholders meeting. Any proceeds from the sale of the 3,000,000 pledged shares and/or any dividends on such securities will first be applied to the repayment of the loan before they can be paid to Mr. Adamou. In the event that shareholders do not ratify the transaction at IDC’s next shareholders meeting, in which case the 2,000,000 escrowed shares will be cancelled, then: (i) where the weighted 20 day average closing price of an IDC share as at such meeting date is greater than $0.276, Mr. Adamou will be entitled to a cash payment representing the value of the cancelled escrowed securities up to a maximum aggregate amount of $750,000 based on the difference between a weighted 20 day average closing price of an IDC share as at such meeting date and the transaction share issuance price of $0.276; or (ii) where the weighted 20 day average closing price of an IDC share as at such meeting date is less than $0.276, the loan to Mr. Adamou will be reduced by the value of the cancelled escrowed securities as at such meeting date. In the event that shareholders ratify the transaction as set forth above, the 2,000,000 shares will be released from escrow and Mr. Adamou has agreed not to trade 1,000,000 of such securities until six months after the date of the shareholders meeting.
Mr. Adamou added, “We have a fundamental belief that great businesses require long-term shareholders, long-term employees and long-term customer relationships. This long term orientation will be reflected in the shareholders that we seek, our operating and investment decisions, our customer relationships, our compensation programs, and in everything that we do. We look forward to sharing more of our plans with you in the New Year.”
About International Datacasting Corporation (IDC):
International Datacasting Corporation (TSX: IDC) is a global leader in IP-based datacasting solutions for the distribution of broadband multimedia content. IDC has a broad portfolio of advanced technology products marketed under the names SuperFlex, Datacast XD, Tiernan, Logic Innovations and PROFline for implementing a wide range of broadband content contribution and distribution networks. IDC's products are in demand for radio and television broadcast networks, distance learning, digital satellite news gathering and sport contribution, digital signage, digital cinema, IPTV distribution and other applications. IDC is headquartered in Ottawa, Canada, with regional offices in Arnhem, the Netherlands and in San Diego, California. International in scope, IDC has installations in over 100 countries and service offices in Australia, Singapore and China and an international network of value-added partners and distributors.
This press release contains forward-looking statements, including statements as to IDC's planned acquisition and capital deployment strategies, that involve risks and uncertainties. Actual results may differ materially. Factors that might cause a material difference include, but are not limited to, competitive developments, risks associated with IDC's growth, the development of the satellite datacasting market, regulatory risks, intellectual property infringement and other factors. These statements are provided to assist external shareholders in understanding IDC's expectations as at the date of this release and may not be suitable for other purposes. IDC assumes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof, except as expressly required by law. More detailed information about potential factors that could affect IDC's financial and business results is included in IDC's Annual Information Form dated April 30, 2010 and the other public documents IDC files from time to time with Canadian securities regulatory authorities.