Cantronic Sells its North American Business
Cantronic Systemsannounced that it has entered into a definitive agreement for the sale of its North American Business, comprising the thermal imaging business located in Coquitlam...
Cantronic Systems announced that it has entered into a definitive agreement for the sale of its North American Business, comprising the thermal imaging business located in Coquitlam, British Columbia as well as QWIP Technologies Inc. of Brea, California.
The North American Business will be sold to Skytech Systems Inc., a private company located in Vancouver, British Columbia controlled by a current mid-level employee of the North American Business, who will no longer work for Cantronic once the sale is completed. Skytech Systems Inc. will change its name to Cantronic Systems (Canada) Inc.
The transaction is valued at approximately C$5.7 million subject to post-closing adjustments, reflecting a purchase price of C$4.3 million and accrued interest of $1.4 million, with payments to Cantronic Systems Inc. scheduled over a 9-year period. The sale is expected to close in the beginning of April 2011, subject to customary closing conditions. After the sale, Cantronic will continue to have the right to use some of the thermal imaging technologies of the North American Business for commercial security and surveillance applications outside of North America.
"We believe that this transaction is strategically important for us," commented James Zahn, President and CEO of Cantronic. "After the sale of the North American Business, we will continue focus on our China Growth Strategy. In the short term, we will no longer be required to fund losses in the North American Business that have had a negative impact on the Company's income statement in recent quarters. In the long term, we will be able to focus all our efforts on continued development in the China video surveillance market which we believe will offer tremendous growth opportunities for us in the coming years," Mr. Zahn concluded.
