Momentum Advanced Solutions Inc.

Momentum Advanced Solutions Inc.

March 27, 2009 18:30 ET

Momentum Board Recommends Privatization Transaction

MARKHAM, ONTARIO--(Marketwire - March 27, 2009) - Momentum Advanced Solutions Inc. (TSX:WWW), (Momentum or the Company), announced today that it had entered into an arrangement agreement (the Agreement) with Sheldon Pollack and Phillip De Leon, the Chief Executive Officer and President, respectively, of Momentum, and two companies controlled by them, 1388616 Ontario Inc. and 1388617 Ontario Inc. (the Offerors). The Offerors, together with their associates and affiliates, control in the aggregate, 25,693,423 common shares of Momentum or approximately 40% of the outstanding issue. Pursuant to the proposed arrangement the Offerors would acquire all of the common shares in the capital of Momentum not currently owned by them.

The Agreement provides for the payment of cash consideration of $0.22 per common share to the shareholders of Momentum (other than the Offerors, their associates and affiliates). The Agreement further provides that the cash consideration may be reduced by the Offerors to $0.20 per share if the transaction is not completed on or prior to April 30, 2009, unless the delay is due to the actions or inactions of the Offerors. The $0.22 offer price represents a 267% premium over the TSX closing price of the shares on February 20, 2009, the last trading day prior to the initial announcement of the Offerors proposal to undertake this transaction.

The Agreement provides for the transaction to be carried out by way of an arrangement under the Business Corporations Act (Ontario) and will be subject to approval of two thirds of the common shareholders as well as a majority of those shareholders other than the Offerors, present in person or by proxy at a special meeting of shareholders, expected to be held on April 29, 2009, unless adjourned to another date (the Meeting).

The transaction is subject to customary conditions including the receipt of necessary court and regulatory approvals and the Offerors have represented that they will have cash funds sufficient to consummate the transaction. The Offerors have confirmed that they have received written support agreements or written expressions of support for the transaction from third party shareholders holding in aggregate 16,890,500 common shares, representing approximately 44% of the outstanding shares that are not under the control or direction of the Offerors, their associates and affiliates. The Agreement contains various termination provisions, including customary fiduciary outs which permit Momentum to, terminate the Agreement in the event of a superior offer. Under the Agreement Momentum has the right, up to and until the date prior to the Meeting, to solicit other acquisition proposals on certain conditions, provided that such activity is intended to elicit a Superior Proposal.

A committee of independent directors (the Special Committee) was formed to review the Offeror's proposal as well as to consider any other alternatives. The Special Committee has retained Pivotal Decisions Inc. as strategic advisor to identify and develop potential alternative transactions. The Special Committee has received an opinion (the Fairness Opinion) from Meyers Norris Penny LLP ("MNP") that the transaction is fair, from a financial point of view, to the shareholders of Momentum, other than the Offerors. The Special Committee also received a formal valuation (the Valuation) from MNP which valued the common shares of Momentum within a range of $0.195 to $0.229 per share. The Board of Directors, upon the recommendation of the Special Committee, has unanimously approved the transaction. A copy of the Fairness Opinion and the Valuation as well as other relevant background information will be included in an information circular to be mailed to Momentum's shareholders in advance of the Meeting. A material change report, which provides more detail on the transaction as well a copy of the Agreement, will be filed with the securities regulators shortly and shall be available at The transaction is expected to be completed on or before April 30, 2009.

Shareholders are encouraged to consult their own investment dealer, stockbroker, bank manager, accountant, lawyer or other professional advisor with respect to the proposed arrangement.

Forward Looking Statement

This press release contains forward-looking information. All forward-looking information is based on management's best estimates and the current operating environment. Forward-looking information typically contains words such as "anticipate", "believe", "should", "may", "expect", "intend", "plan" or similar words suggesting future outcomes. These statements are based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information, including Momentum s perception of historical trends, current conditions and expected future developments as well as other factors management believes are appropriate in the circumstances.

Such forward-looking information is as of the date hereof and is subject to a number of known and unknown risks, uncertainties and other factors which could cause actual results or events to differ materially from future results or events expressed, anticipated or implied by such forward-looking information. Such factors may include but are not limited to, the ability of the parties to complete the subject transaction in the time period and upon the terms anticipated or at all which is dependent upon, among other things, the parties ability to comply with the closing conditions contained in the Agreement, many of which are beyond the control of Momentum, third parties interest in Momentum and its business, general economic conditions, the state of the capital markets, performance of the market sectors that Momentum and the parties with potential interest in acquiring or entering into a strategic transaction with Momentum serve and other risks detailed from time to time in Momentum s filings with securities regulators. Therefore, actual outcomes and results may differ materially from those expressed in such forward-looking information. Readers are cautioned that such information may not be appropriate for other purposes. Other than as may be required by law, Momentum disclaims any intention or obligation to update or revise any such forward-looking information, whether as a result of new information, future events or otherwise.

About Momentum Advanced Solutions Inc.

Momentum is a leader in Web outsourcing services. Its solutions provide customers with the innovation, integration, and operational expertise needed to reduce costs and/or improve productivity by outsourcing their mission critical, web-based applications and infrastructure to Momentum. Headquartered in Markham, Ontario, Momentum has offices in Ottawa, Windsor, Calgary and Toronto. Momentum Advanced Solutions is publicly traded on the Toronto Stock Exchange and trades under the symbol WWW.

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