ZTEST NEGOTIATES ACQUIRING REMAINING INTEREST IN PERMATECH ELECTRONICS CORP.
MISSISSAUGA, ONTARIO--ZTEST Electronics Inc. ("ZTEST" or the "Corporation")(CDNX - "YZT") is pleased to announce that it has entered into negotiations to acquire the remaining outstanding shares of Permatech Electronics Corp. ("Permatech"). On August 16, 2001, ZTEST announced that it had acquired 60% of the outstanding common shares of Permatech for cash. ZTEST intends to issue up to 7,139,429 common shares of ZTEST to acquire the remaining interest in Permatech. John Perreault, the President, director and shareholder of Permatech will receive approximately 5,375,247 common shares of ZTEST as a result of this transaction. Mr. Perreault is not otherwise an officer, director or shareholder of ZTEST. No other shareholder of Permatech is a related party. For the purposes of this acquisition, and subject to regulatory approval, Permatech will be valued at 1.25 times its total sales for the twelve month period commencing on October 1, 2000 and ending September 30, 2001 less liabilities at closing. The estimated value of Permatech is currently $1,678,193. Shareholders of Permatech will receive one (1) common share of ZTEST for every $0.11 of value attributed to their shares on the closing of the acquisition. The terms of the acquisition were the result of arm's length negotiations between Mr. Perreault and ZTEST. As a result of this transaction, Mr. Perreault may own up to 18.8% of ZTEST's outstanding capital. No finder's fee is being paid in connection with this transaction.
The above transaction is subject to the disclosure requirements of Ontario Securities Commission Rule 61-501 (the "Rule") as the transaction comes within the definition of a related party transaction contained in the Rule. However, the transaction is exempt from the valuation and minority shareholder approval requirements of the Rule by virtue of the exemptions contained in sections 5.6(2) and 5.8(2) of the Rule as the value of the consideration being paid to Mr. Perreault does not exceed 25% of ZTEST's market capitalization. The value of Mr. Perreault's consideration will be $591,277 and ZTEST's market capitalization is currently $2,604,506, 25% of which is $651,126.
The above transaction is subject to regulatory and shareholder approval.
Permatech is an ISO9002 certified contract manufacturer in the electronic industry. It provides full surface mount and through-hole capacity and it well positioned to service customers with small to medium quantity requirements.
The issued and outstanding capital of ZTEST is 24,071,167 common shares.
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This news release may include statements that constitute forward-looking statements. Please be cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may vary materially from those in the forward-looking statements as a result of any number of factors, including risk factors contained in the Company's disclosure documents.
The Canadian Venture Exchange has neither approved nor disapproved of the contents of this press release.