Datamark Systems Group Inc.

Datamark Systems Group Inc.

April 25, 2007 15:04 ET

Datamark Systems Group Inc. Announces Amendment to Previously Announced Acquisition Agreement


Datamark Systems Group Inc. (TSX:DMK) On February 9, 2007, Datamark announced that it had entered into an Acquisition Agreement with Komunik Corporation providing for the combination of Komunik, a private Montreal-based company, and Datamark (the "Combined Entity") pursuant to which Datamark shareholders would, at their option, be entitled to a consideration per share equal to $2.22 in cash; or one share of the Combined Entity; or a combination thereof, subject to pro-ration and subject to certain adjustments.

As announced, the closing of the transaction is subject to the approval of Datamark's shareholders, applicable regulatory and court approvals, and certain other conditions.

Datamark announces today that Komunik advised Datamark that it required amendments to the previously announced Acquisition Agreement in order to proceed with the proposed acquisition. After having explored the options available to it, Datamark agreed to negotiate amendments to the Acquisition Agreement and announces that Datamark and Komunik have entered into an agreement to amend the Acquisition Agreement (the "Amended Agreement").

Pursuant to the Amended Agreement, for each Datamark share held, Datamark shareholders will now, at their option, be entitled to a consideration per share equal to $1.98 in cash; or one share of the Combined Entity; or a combination thereof subject to pro-ration and subject to adjustments, depending on the debt of Datamark. Upon completion of the transaction, current Datamark shareholders will receive 12.90% of the fully-diluted equity of the Combined Entity (without considering out-of-the money options). The Amended Acquisition Agreement provides that, in the aggregate, 64.5% of Datamark's shares will be exchanged for cash and 35.5% will be exchanged for shares of the Combined Entity.

Under the terms of the Amended Agreement, the consideration to be paid to Datamark shareholders is subject to adjustment in the event the debt of Datamark, which is being assumed by the Combined Entity, exceeds $9,000,000 or is less than $8,800,000 as determined on the Debt Determination Date. The Amended Agreement stipulates that the Debt Determination Date shall be May 31, 2007, provided the Datamark Special and Annual General Shareholder Meeting (the "Datamark Meeting") at which the Datamark shareholders will vote on the transaction, takes place on or before June 8, 2007 but not before June 6, 2007.

If the consideration to be paid to Datamark shareholders is adjusted, Datamark will issue a press release setting out such adjustments no later than two business days before the Datamark Meeting.

The amendments to the transaction have been unanimously approved by both Komunik's and Datamark's Boards of Directors. The Board of Directors of Datamark has determined that the transaction, as amended, is in the best interest of Datamark and that the revised consideration offered pursuant to the combination is fair to the Datamark shareholders and unanimously recommends that holders of Datamark shares vote in favour of the transaction, as amended.

Datamark shareholders holding 66.59% of Datamark's shares have entered into definitive agreements whereby they agree to support the amended transaction.

The amended transaction is subject to the approval of Datamark's shareholders at the Shareholder Meeting expected to be held on or before June 8, 2007, applicable regulatory and court approvals, and certain other conditions. The amended transaction is expected to close on or about June 8, 2007.

About Komunik

Komunik is a provider of end-to-end solutions for relationship marketers. Through technology innovation, Komunik helps Fortune 1000 companies increase their control of the marketing environment. Komunik provides marketers with world-class expertise and support for multi-channel activities and business process optimization. Komunik's value proposition includes: Marketing Programs Outsourcing, Email Marketing, Interactive Marketing and Variable Printing Solutions. The Company's proprietary technology provides a flexible feature set to meet marketers' demands. Konversation, a modular technology platform, is designed to optimize and integrate business processes and relationship marketing activities.

About Datamark

Datamark Systems Group Inc. is dedicated to providing efficient and innovative document Management solutions. The company's operating divisions and subsidiaries, Datamark Systems, Proforms and Les Impressions Intra-Media Inc. provide a full range of products and services including forms, labels, airline products and short and long run commercial printing. Document management services encompass warehousing and distributions as well as customized inventory and cost reporting. Datamark Systems Group Inc.'s plants and distributions centers are in Quebec, Ontario, Manitoba and Alberta. Datamark Systems Group Inc.'s shares are listed on the Toronto Stock Exchange under the symbol DMK.

Cautionary note about forward-looking statements

Some of the statements made in this release may constitute forward-looking information or statements within the meaning of securities laws. These statements are based on certain factors and assumptions, which Datamark and Komunik believe are reasonable as of the current date. While Datamark and Komunik consider these assumptions to be reasonable based on information currently available to us, they may prove to be incorrect. Datamark and Komunik caution that actual future performance could be affected by a number of factors, including technological change, regulatory change and competitive factors, many of which are beyond Datamark's and Komunik's control. Therefore, future events and results may vary substantially from what Datamark and Komunik currently foresee. While Datamark and Komunik may elect to, they are under no obligation (and expressly disclaim any such obligation) and do not undertake to update or alter this information.

Contact Information

    450-663-7878, EXT. 410.
    Emily Bradshaw/Safia Genereux-Khali
    Massy-Forget Public Relations
    514-842-2455 extension 26 or 31 /