Synergex Corporation
TSX : SYX

Synergex Corporation

June 26, 2008 18:16 ET

Synergex Further Strengthens Focus on Core Logistics and Distribution Business

MISSISSAUGA, ONTARIO--(Marketwire - June 26, 2008) - Synergex Corporation (TSX:SYX) today announced the sale of its third party collections workgroup.

The divestiture is further progress by Synergex to achieve its goal of focusing on its core integrated logistics and distribution services businesses, including its expansion into Latin America.

David Aiello, the majority shareholder of Synergex, will acquire the share ownership of this former workgroup through a private company controlled by him. Terms of the purchase will require the payment of the existing intercompany balances in full by issuance of a note payable for approximately $3.2 million. 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 $2.2 million as a result of the sale.

"The divesture of this workgroup is the latest step in executing our continuing plan to focus on our profitable core business of delivering supply chain management solutions for the computer entertainment and video game sectors," said David Aiello, President and CEO of Synergex Corporation. "We are concentrating our efforts on expanding our supplier and retailer network, profitably diversifying our product line, and leveraging our expertise in building business in new high growth markets through our geographic expansion into Latin America."

The sale follows the Company's recent divesture of its Technology workgroup pursuant to the previously announced intention to focus on the Company's core business. The third party collections workgroup represented less than 0.7% of total Company revenues of $203.6 million in 2007, and has generated net losses including a net income loss of $324 thousand for the year ended December 31, 2007, and has continued to generate losses during 2008. The sale eliminates the impact of ongoing losses from this workgroup in future Synergex financial results.

About Synergex Corporation

Synergex is a Canadian-based international integrated logistics company providing distribution, freight forwarding and logistics 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