OnX Enterprise Solutions Inc.

OnX Enterprise Solutions Inc.

December 01, 2006 06:20 ET

OnX Enterprise Solutions Announces Name Change and Sale of VAR Business

TORONTO, ONTARIO--(CCNMatthews - Dec. 1, 2006) - OnX Enterprise Solutions Inc. (TSX:ON), (the "Company") announced today that it has completed the sale of its hardware and software resale and infrastructure solutions and services business (the "VAR Business"), effective November 30, 2006. The VAR Business, which will be known as OnX Enterprise Solutions Ltd., was acquired by a company controlled by Sheldon Pollack and Phil DeLeon, for net proceeds of $6.8 million, $4.5 million of which was paid on closing and the balance of which is payable six months after closing. Messrs. Pollack and DeLeon are the two largest shareholders of the Company. In connection with the transaction, the Company has been renamed Momentum Advanced Solutions Inc. and will begin trading under the ticker symbol (TSX:WWW) on or about December 8, 2006.

As previously reported, the transaction was reviewed and evaluated by a committee of independent directors of the Company (the "Committee"). The Committee engaged an independent valuer to prepare a valuation of the VAR Business. The independent valuer established a value range for the VAR Business, the mid-point of which was approximately $6.7 million, and issued a favourable fairness opinion with respect to the transaction. Based on the independent valuation and fairness opinion, as well as a detailed review of the benefits of the transaction to the Company, the Committee recommended approval of the transaction to shareholders. The transaction required approval by a majority of the minority shareholders of the Company which was obtained at a meeting held on November 28, 2006. Over 83% of the votes held by minority shareholders represented at the meeting were cast in favour of the transaction.

In light of the historically low share price and corresponding market value for the Company, management and the board of directors of the Company (the "Board") evaluated various strategic initiatives with a view to enhancing shareholder value. This included consideration of possible merger opportunities with companies in similar or complementary businesses. In the course of this process, it was concluded that divesting the low margin, unpredictable VAR Business would be a critical first step in achieving the Company's stated objective of becoming a leading provider of web-based application and infrastructure outsourcing.

Momentum Advanced Solutions Inc. will continue to operate its existing Web Solutions and Services and Managed Services businesses. These businesses are industry leaders in Internet Outsourcing which represents the unification of Internet Strategy, Internet Application Development and Internet Infrastructure Management. Revenue from these businesses grew 20% from fiscal year 2005 to fiscal year 2006 with a significant portion being of a recurring nature. Current revenues approximate $15.0 million with gross profit margins in the 35% - 40% range. The total proceeds from the sale of the VAR business will be available for working capital and to fund growth and strategic acquisition opportunities.

The transaction will allow each company to focus on their core competencies thereby providing improved service, flexibility and responsiveness to customers. Momentum and OnX Enterprise Solutions Ltd. will work together to cross promote offerings ensuring continuity of existing relationships with customers, vendors and other stakeholders. Messrs. Pollack and DeLeon will continue in their executive roles with the Company.

Forward Looking Statement

Investors should take note that certain statements in this press release are forward-looking and may not give full weight to all of the potential risks and uncertainties. These forward-looking statements include statements that are subject to risks and uncertainties. Forward-looking statements are subject by their nature to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the forward-looking statements. Any forward-looking statements speak only as of the date made. The company is not undertaking to update any information in the foregoing reports until the effective date of its future reports required by the securities laws.

About Momentum Advanced Solutions Inc.

Momentum is a leading provider of Internet Strategy, Internet Application Development and Internet Infrastructure Management. For over two decades, Momentum has been helping organizations grow revenues, reduce costs and, overall, manage the complexity and risks associated with information technology. Headquartered in Markham, Ontario the Company has offices in Ottawa, Windsor and Toronto. Momentum Advanced Solutions is publicly traded on the Toronto Stock Exchange and will begin trading under the symbol "WWW" on or about December 8, 2006.

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