- One-time gain expected to be $0.12 to $0.18 per share -
Toronto Stock Exchange Symbol: RC
WATERLOO, ON, April 19 /CNW/ - RDM Corporation (TSX: RC) today announced
that Xign Corporation has signed an agreement to sell Xign to JPMorgan Chase
Bank, N.A. Upon completion of the transaction RDM expects to receive net cash
proceeds of approximately $9.0 million ($7.95 million U.S.). In addition, RDM
may receive additional proceeds of up to $1.2 million ($1.05 million U.S.)
which are being held in escrow for a one year period from the closing date.
The amount received from escrow is impacted by a number of items including the
final purchase price adjustments.
The closing of the transaction is subject to shareholder approval, U.S.
regulatory approval and customary closing conditions, and is expected to occur
within RDM's current fiscal year which ends September 30, 2007. Upon closing
RDM expects to record a one-time after-tax gain of approximately $2.6 million
to $3.8 million, or $0.12 to $0.18 per share depending on the escrow amount.
There are no tax consequences of the sale given the tax basis of the
investment. All figures are quoted in Canadian dollars based on current
exchange rates unless otherwise stated.
Other than the one-time gain and cash infusion, the sale of Xign will
have no impact on RDM's operations or reported financial results. Following
the closing there will be no ongoing affiliation between RDM and Xign, and no
director or employee of RDM will have any direct or indirect interest in Xign.
"This transaction will benefit RDM by enabling us to more effectively
redeploy capital to growth opportunities," said Douglas Newman, President and
CEO of RDM Corporation.
About RDM Corporation
RDM Corporation is headquartered in Waterloo, Ontario and trades on the
Toronto Stock Exchange under the symbol RC. RDM is a leading provider of
specialized software and hardware products for electronic payment processing.
RDM has pioneered electronic cheque conversion systems and web-based image and
transaction management services for banks, retailers, payment processors and
government agencies. RDM's Image & Transaction Management System (ITMS) is an
industry leading e-cheque processing solution whereby transaction information
can be remotely captured and processed electronically from distributed
locations, freeing up significant customer float time and significantly
reducing costs associated with returned checks. For further information, visit
RDM's website at www.rdmcorp.com.
For further information:
For further information: Jeff Codispodi, Investor Relations, The Equicom
Group Inc., (416) 815-0700 ext. 261 phone, (416) 815-0080 fax,
firstname.lastname@example.org; James Merwin, Chief Financial Officer, RDM
Corporation, (519) 746-8483 ext. 284 phone, (519) 746-3317 fax,