VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 3, 2010) - Cantronic Systems Inc., ("Cantronic" or the "Company") (TSX VENTURE:CTS), today announced that it has entered into a definitive agreement to acquire Actiontop Electronics (consisting of 100% of the equity interest of both Actiontop Electronics (Shenzhen) Co. Ltd. and Actiontop Electronics (HK) Co. Ltd.), a privately owned manufacturer of high-speed video surveillance cameras and related products. The transaction is valued at C$3,382,400 (approximately RMB 23 million) and is expected to close by the end of June, 2010, subject to customary closing conditions. Actiontop Electronics has a profitable track record including several years of revenue and earnings and this transaction is expected to be immediately accretive to Cantronic's earnings.
"Actiontop's high-performance technology complements and enhances our current end-to-end security and surveillance system product offerings. This acquisition reflects our commitment to strengthening our competitive position by consolidating best-in-class technologies in addressing the growing market demand for our products in China, driven by government programs for national video surveillance," said James Zahn, President and CEO of Cantronic. "Actiontop has a track record with us as an OEM supplier to Cantronic and we are confident that Actiontop is a positive addition to our business. We intend to leverage our current sales and distribution network in offering Actiontop's products and solutions to the market."
Management expects Actiontop to generate RMB 30 to RMB 31 million in revenue in 2010, with an estimated 15 to 20% net profit.
Highlights of the Definitive Agreement
Based on the terms of the definitive agreement, the total purchase price of C$3,382,400 will be financed with C$1,176,500 in cash and C$2,205,900 in Cantronic shares, both payable on closing. The equity portion of payment will consist of two tranches. The first tranche of C$1,470,600 will be priced at C$0.40 per share and held in escrow for one year from issuance. The second tranche of C$735,300 will be priced at C$0.50 per share and held in escrow for two years from issuance. The purchase price is subject to post-closing adjustments.
About Actiontop Electronics
Actiontop Electronics was established in 1999 and has factory facilities in Shenzhen, China. Actiontop engages in the design, manufacturing, sales and support of high-speed video surveillance camera products, including a variety of domes and zoom lenses, vandal-proof cameras, controllers, matrices and other accessories. Actiontop manufactures its products in its facility located in Shenzhen, China. Actiontop has an established customer base in China and generates approximately 60% of sales internationally through distributors and OEM agreements. For more information on Actiontop Electronics, please visit www.actiontop.cn/en
About Cantronic Systems Inc.
Cantronic Systems Inc. manufactures, distributes, and provides training and services in the fields of infrared vision and video security surveillance technologies, specializing in passive and active infrared cameras, infrared illuminators, low light infrared sensitive CCD cameras and long-range night vision surveillance systems for demanding homeland security and surveillance application.
Cantronic, through its US subsidiary QWIP Technologies, Inc. ("QWIPTECH"), holds a worldwide, exclusive license from the California Institute of Technology ("Caltech") to produce and sell infrared detectors and sensors based on Caltech's Quantum Well Infrared Photodetector technology.
Cantronic, through its China subsidiaries Cantronic Security Systems (China) Co. Ltd., Beijing Advanced Videoinfo Technology Co. Ltd. ("AVINFO") and Shenzhen Huanghe Digital Technology Co. Ltd. ("Yellow River"), provides digital networked video surveillance solutions to government and corporate customers in China.
Cantronic is a Tier 1 issuer on the TSX-V exchange, trading under the symbol CTS. For further information about Cantronic and QWIPTECH, please visit our websites at www.cantronics.com and www.qwip.com.
This news release contains forward-looking statements, within the meaning of applicable securities legislation, concerning Cantronic Systems Inc. and the markets in which it operates. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance and achievements of Cantronic to be materially different from any future results, performance or achievements expressed or implied by said forward-looking statements.
Forward-looking statements include, but are not limited to: the completion of the Proposed Transaction, anticipated share capital following completion of the Proposed Transaction, expectations, opinions, forecasts, projections and other similar statements concerning anticipated future events, conditions or results that are not historical facts. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".
Readers are cautioned not to place undue reliance on such forward-looking statements. Forward-looking information is provided as of the date of this news release, and Cantronic Systems Inc. assumes no obligation to update or revise them to reflect new events or circumstances, except as may be required under applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.