Mitec Telecom arranges to sell California military division

MONTREAL, Nov. 2, 2011 /CNW Telbec/ - Mitec Telecom Inc. ("Mitec") (TSX: MTM) today announced that it has arranged to sell its Keragis military division, located in Poway, California to Robert Rector and Maria Rector (the "Rectors"), the founders of Keragis.

The transaction is valued at approximately $1 million and was comprised of a combination of cash and cash equivalents, debt (secured on the assets of Keragis and personally guaranteed by the Rectors), an ongoing royalty and redemption of Mitec shares. Mitec's decision to divest Keragis resulted from a significant evaluation of its technology, status in its market as well as other factors involving its intellectual property.

"The analysis of Keragis led to the conclusion that its performance to date has not achieved the milestones that Mitec demands in order to ensure long-term sustainable profitability", said Jeffrey Mandel, Mitec's President and Chief Executive Officer.

"Keragis offers very compelling technology that has succeeded in catching the attention of several large military players, but Mitec believes it still requires specialized hands-on support in addition to substantial capital investment in order to achieve its full commercialized potential", said Mandel.  "The Rectors are better positioned to be able to provide the hands-on support and capital commitment that is required to realize on Keragis' opportunities."

About Mitec Telecom Inc.

Mitec is a leading designer and provider of radio frequency (RF) products for the telecommunications and satellite communications industries, as well as a variety of other sectors. Mitec sells its products worldwide to network providers for incorporation into high-performing wireless networks used in voice and data/internet communications. Mitec is located in Montreal, Canada. Mitec is listed on the Toronto Stock Exchange under the symbol MTM.  On-line information about Mitec is available at www.mitectelecom.com.

SOURCE MITEC TELECOM INC.

For further information:

Source:  Mitec Telecom Inc. 
Contact: 


Mr. Jeffrey Mandel 
President, Chief Executive Officer and Chairman of the Board of Directors 
jeffrey.mandel@mitectelecom.com
Tel.:  (514) 694-9000

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MITEC TELECOM INC.

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