Logibec Groupe Informatique Ltd.
TSX : LGI

Logibec Groupe Informatique Ltd.

May 26, 2005 19:22 ET

Logibec Announces Agreement to Increase All-Cash Offer For All Outstanding Common Shares of MDI Technologies, Inc.

MONTREAL, QUEBEC--(CCNMatthews - May 26, 2005) - Logibec Groupe Informatique Ltd. (TSX:LGI) ("Logibec") announced today that it has reached an agreement that will enable it, through its wholly-owned subsidiary, LGI Acquisition, Inc. ("LGI"), to increase the consideration being offered under LGI's offer (the "Offer") to purchase all the outstanding common shares (the "Shares") of MDI Technologies, Inc. (TSX-V: MDD.U) ("MDI Technologies") from US$2.40 to US$2.60 per Share in cash.

Logibec and LGI have signed a letter agreement (the "Letter Agreement") with MDI Technologies, its President and Chief Executive Officer, Todd A. Spence, and its Executive Vice-President and Secretary, Di Anne Kerrigan. Pursuant to the Letter Agreement, LGI has agreed to increase the consideration under the Offer from US$2.40 to US$2.60 per Share in cash provided that (i) each of Mr. Spence and Ms. Kerrigan (the "Executives") agrees, provided that the Offer is successful, to waive his or her entitlement to a termination payment under the employment agreements between the Executives and MDI Technologies which may otherwise arise by virtue of the termination of such Executive's employment by MDI Technologies (the "Termination Waivers"), (ii) each of the Executives agrees to, provided that the Offer is successful, provide consulting services to Logibec until December 31, 2005 (the "Consulting Arrangements") in order to ensure a smooth transition period and to maximize client and employee retention during such period and (iii) each of the Executives agrees to enter into a lock-up agreement (the "Lock-ups") with LGI under which each Executive agrees to tender to the Offer all Shares beneficially owned or over which the Executive exercises control or direction (including all Shares issuable upon the exercise of options to purchase Shares).

In consideration for LGI's agreement to amend the Offer, MDI Technologies and each of the Executives has agreed no to solicit, encourage or continue any inquiries or proposals from, or negotiations with, any person, company or other entity other than LGI or any of its affiliates relating to the purchase of Shares, any amalgamation, merger or other form of business combination involving MDI or any of its subsidiaries, any sale, lease, exchange or transfer of all or a substantial portion of the assets of MDI or any of its subsidiaries, or any take-over bid, reorganization, recapitalization, liquidation or winding-up of or other business combination or other transaction involving MDI Technologies or any of its subsidiaries with any person other than LGI or any of its affiliates (a "Proposed Transaction").

The parties have also entered into definitive agreements regarding the Termination Waivers and the Consulting Arrangements and the Lock-ups (collectively, the "Executive Agreements"). LGI intends to file and disseminate as soon as practicable but in any event prior to June 3, 2005, the current expiry date of the Offer, a notice of variation (the "Notice of Variation") (i) increasing the consideration under the Offer to US$2.60 per Share, (ii) extending the period during which Shares may be tendered under the Offer to a date which is at least ten days following the delivery of the Notice of Variation and (iii) making the Offer conditional on there being validly deposited under the Offer and not withdrawn that number of Shares which, together with Shares owned by LGI and its affiliates, constitutes at least 90% of the outstanding Shares (on a fully diluted basis).

"We applaud Todd Spence and Di Anne Kerrigan for making personal financial concessions in an effort to obtain a higher bid price for all shareholders and we are optimistic that our amended offer will be successful" said Mr. Claude Roy, President and Chief Executive Officer of Logibec.

ABOUT LOGIBEC

LOGIBEC is among the ten largest Canadian companies specializing in the development, marketing, implementation and support of information systems for the health and social services sector. Over 400 health organizations use its products and services delivered by an experienced team of employees that numbered over 200 as of March 31, 2005. The Company has its head office in Montreal as well as offices in Quebec City and Edmonton.

This news release contains forward-looking statements reflecting Logibec Groupe Informatique Ltd. objectives, estimates and expectations. Such statements may be marked by the use of verbs such as "believe", "anticipate", "estimate" and "expect" as well as the use of the future or conditional tense. By their very nature, such statements involve risks and uncertainty. Actual results may differ significantly from the Company's forecasts or expectations.

The TSX Venture accepts no responsibility for the truth or accuracy of this press release.

Contact Information

  • LOGIBEC GROUPE INFORMATIQUE LTD.
    Claude Roy
    President and Chief Executive Officer
    (514) 766-0134
    claude_roy@logibec.com