Digital Dispatch Systems Inc.

Digital Dispatch Systems Inc.

February 21, 2008 08:00 ET

Digital Dispatch Releases StrataGen Acquisition Report

RICHMOND, BRITISH COLUMBIA--(Marketwire - Feb. 21, 2008) - Digital Dispatch Systems Inc. (TSX:DD) announced that it has released and filed on the Business Acquisition Report ("BAR") for its previously announced acquisition of StrataGen Systems Inc. ("StrataGen"), a Kirkland, Washington-based software company specializing in automated dispatching and wireless data transfer applications for passenger transport.

StrataGen has a strong customer base with the majority of its revenue derived from this source. For the nine months ended September 30, 2007, StrataGen reported total revenue of US$3.4 million with net income of US$719,000 representing increased revenue for fiscal 2007 over the prior year. The total consideration for the transaction is US$8.0 million inclusive of additional contingent consideration of US$2.3 million payable by the Company in common shares or cash at its discretion upon achievement of certain sales order performance factors resulting in a revenue multiple of approximately 1.7 paid by Digital Dispatch for this strategic acquisition.

According to Vari Ghai, CEO of Digital Dispatch, "The combination with Digital Dispatch enables StrataGen to expand to international markets while providing the market with an integrated complete solution which differentiates the combined entity from the competition. This results in a more competitive and effective go to market offering for StrataGen. By combining the transit businesses of Digital Dispatch and StrataGen, Digital Dispatch achieves critical mass in the transit industry and becomes a vertically integrated turnkey solutions company. The combined customer base includes 4 of the top 5 and 10 of the top 20 transit authorities in North America."

The acquisition of StrataGen in addition to the recent acquisition of Mobisoft OY by Digital Dispatch is consistent with Digital Dispatch's strategic diversification plan which will result in the Company being segregated into the following distinct business units as follows to achieve the market focus required to drive future growth:

1. Integrated Digital Dispatch and MobiSoft business unit servicing the taxi market including the new advertising and eCommerce in the back-of-vehicle;

2. Integrated StrataGen and MobiSoft demand response transit business unit servicing the transit market;

3. eFleet ASP hosted business unit for the trucking, towing and limo markets; and

4. Mobile MDT computers and related data communication infrastructure in a hardware business unit.

With the acquisition effective as at October 31, 2007, the financial results of StrataGen will be included in Digital Dispatch's consolidated financial results commencing with the three months period ended December 31, 2007.

2007 Year End and Fourth Quarter Earnings Release

Digital Dispatch will announce its 2007 year end and fourth quarter financial results on March 19, 2008. The financial statements and MD&A will be available on the Company's web site and on SEDAR at that time. The Company will also host a conference call at 5:00 PM EST (2:00 PM PST) on the same day to discuss the financial results. Please call 416-641-6142 or 1-866-300-7687 to participate in the call. A replay of this conference call will be available until March 26, 2008, by dialing 416-695-5800 or 1-800-408-3053 and entering access code 3253430.

About Digital Dispatch Systems Inc.

Digital Dispatch Systems Inc. is a worldwide provider of mobile data solutions for fleet and mobile workforce management. Founded in 1987, we have an installed base of more than 75,000 wireless mobile data devices and nearly 200 wireless data systems in five continents. We offer products and services to manage vehicle fleets and mobile workforces, including dispatch software, wireless communication infrastructure and a range of in-vehicle mobile devices. Visit for more information.

Forward-Looking Statements

This press release contains statements which, to the extent that they are not recitations of historical fact, may constitute forward-looking information. Factors that could cause actual events or results to differ materially from those suggested by these forward-looking statements include, but are not limited to, the integration of the acquisition referred to in this press release with Digital Dispatch and the future financial performance of StrataGen after the acquisition by Digital Dispatch. Additional factors also include the need to develop, integrate and deploy applications to meet our customer's requirements; the possibility of development or deployment difficulties or delays; the dependence on our customer's satisfaction with Digital Dispatch's products; the timing of entering into significant contracts; our customers' continued commitment to the deployment of our solutions; the risks involved in developing integrated software and hardware solutions and integrating them with third-party communication and other services; the performance of the global economy and growth in software industry sales; market acceptance of the Company's products and services; customer and industry analyst perception of the Company and its technology vision and future prospects; the success of certain business combinations engaged in by the Company or by competitors; political unrest or acts of war; possible disruptive effects of organizational or personnel changes; technological change, new products and standards; risks related to acquisitions and international expansion; reliance on large customers; concentration of sales; international operations and sales; management of growth and expansion; dependence upon key personnel and hiring; reliance on a limited number of suppliers; industry growth; competition; intellectual property; product defects and product liability; currency exchange rate risk; concentration of ownership; and including but not limited to other factors described in Digital Dispatch's reports filed on Sedar, including its Annual Information Form and financial report for the year ended December 31, 2006.
In drawing a conclusion or making a forecast or projection set out in the forward-looking information, the Company takes into account the following material factors and assumptions in addition to the above factors the Company's ability to execute on its business plan; the acceptance of the Company's products and services by its customers; the timing of execution of outstanding or potential customer contracts by the Company; the sales opportunities available to the Company; the Company's subjective assessment of the likelihood of success of a sales lead or opportunity; the Company's historic ability to generate sales leads or opportunities; and that sales will be completed at or above the Company's estimated margins. This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. All forward-looking statements made in this press release are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by the Company will be realized. The Company disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.

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