Synergex Corporation
TSX : SYX

Synergex Corporation

June 06, 2008 12:31 ET

Synergex Divests Technology Workgroup to Focus on Core Logistics and Distribution Business

MISSISSAUGA, ONTARIO--(Marketwire - June 6, 2008) - Synergex Corporation (TSX:SYX) today announced the sale of its Technology workgroup.

The divestiture will allow Synergex to focus on its core integrated logistics and distribution services businesses, including its expansion into Latin America.

Terms of the purchase will require the payment of the existing intercompany, balances in full by issuance of a note payable for approximately $3.9 million. David Aiello the majority shareholder of Synergex, will acquire the share ownership of this former workgroup through a private company controlled by him. Synergex will benefit and participate from any future liquidity event or sale of this business but shall have no responsibility to fund future operations subsequent to the closing of the transaction. Synergex will also benefit from an increase in retained earnings of approximately $1.3 million as a result of the sale.

"This sale is another step in our plan to re-align our business and concentrate on delivering a value-added suite of supply chain management solutions for manufacturers and retailers, primarily in the computer entertainment and video games sectors," said David Aiello, President and CEO of Synergex Corporation. "We will now focus on expanding our customer network, profitably diversifying our product line, and building new markets through our geographic expansion into Latin America."

The sale follows the Company's announcement last year of its intention to focus on the Company's core business and analyze the strategic options available. The Technology workgroup represented less than 1.9% of total Company revenues of $203.6 million, in 2007, and has consistently generated net losses including a net income loss of $1.58 million for the year ending December 31, 2007 and has continued to generate losses during 2008. The sale eliminates ongoing losses in future financial results.

About Synergex Corporation

Synergex is a Canadian-based international integrated logistics company providing distribution, freight forwarding and logistic services under its Commercial Gateway business group. It is among the largest distributors of video games, game consoles, and accessories in Canada.

Forward Looking Statements

Some of the statements contained in this news release may be forward-looking statements such as the Company's future plans, objectives and goals. The statements that are not historical facts are forward-looking statements involving known and unknown risks and uncertainties, which could cause actual results to vary considerably from these statements.

Contact Information

  • Company Contact:
    Synergex Corporation
    David Aiello
    President and CEO
    (905) 565-1212
    Email: david.aiello@syx.ca
    or
    Synergex Corporation
    John L. Smith
    SVP
    (905) 565-1212
    Email: john.smith@syx.ca
    or
    Investor Contact:
    Kilmer Lucas Inc.
    Stephen Kilmer
    Managing Partner
    (905) 690-2400 ext. 21
    Email: stephen@kilmerlucas.com
    or
    Media Contact:
    Kilmer Lucas Inc.
    Leonard Zehr
    Senior Partner
    (905) 690-2400 ext. 41
    Email: len@kilmerlucas.com