Versatile Mobile Systems (Canada) Inc.

Versatile Mobile Systems (Canada) Inc.

February 24, 2005 20:16 ET

Versatile to Acquire Perfect Order-Versatile's Revenue to Quadruple


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: VERSATILE MOBILE SYSTEMS (CANADA) INC.

TSX VENTURE SYMBOL: VMS

FEBRUARY 24, 2005 - 20:16 ET

Versatile to Acquire Perfect Order-Versatile's Revenue
to Quadruple

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Feb. 24, 2005) - Versatile
Mobile Systems (Canada) Inc. (TSX VENTURE:VMS), a leading developer and
provider of mobile business solutions, is pleased to announce that it
has entered into a Letter of Intent ("LOI") to purchase all of the
outstanding shares of Perfect Order, Inc. and Perfect Order
Manufacturing, Inc. (collectively "Perfect Order"). All figures are in
U.S. dollars unless otherwise stated.

Since its inception in 1992, Perfect Order has built a strong industry
reputation, enjoyed significant revenue growth and funded the
development of a suite of software products all the while maintaining
profitable operations. In its most recently completed year ended
December 31, 2004, Perfect Order reported revenues of $54.1 million, net
earnings of $1.4 million and EBITDA of $1.8 million (all subject to the
completion of its audit) compared to revenues of $15 million for year
ended December 31, 1998. The acquisition will be accounted for using
the purchase method of accounting and will be immediately accretive to
earnings.

Perfect Order, with over 100 employees, currently has offices located in
Atlanta, Boston, Buffalo, Mechanicsburg, Philadelphia, and Pittsburgh,
and provides a broad suite of information technology solutions for the
implementation, maintenance and security of mission-critical computing
environments. Customers include companies such as Hershey, Motorola,
Tyco (AMP), Comcast, Adelphia Communications, Time Warner (AOL), Mellon
Financial, HSBC, Astra Zeneca, and Bristol Meyers Squibb.

Perfect Order is GSA certified (General Services Administration: the
United States Federal Contracting Agency), and has provided solutions to
US Army, US Navy and Department of Defence. In addition, Perfect Order
has provided solutions to the Commonwealth of Pennsylvania, including
State police, Health and Human Services, and Department of Welfare.
Other customers include the University of Pennsylvania, School District
of Philadelphia, Princeton University, Harvard University, University of
Oklahoma and Penn State.

Perfect Order (www.perfectorder.com) business solutions are powered by
their core product, CommNav, (www.commnav.com; www.sysnav.com), which
provides web-based solutions that allow businesses to aggregate critical
data in a secure framework. This technology leverages key industry
standards including Web services, roles based management, and patented
virtualization technology. Packaged solutions are being used
successfully in diverse industries including, Financial Services,
Communications, Retail, Pharmaceutical, Consumer Packaged Goods,
Government and Higher Education.



Perfect Order offers a broad range of proprietary enterprise-based
software applications. They include:

- Navigator 4.2 / Smart Hub - Portal software which provides an
enterprise framework for development of business applications.
- Biz-Nav Retail - Targets the retail showroom environment
- Smart Lab Management Hub - Lab equipment scheduling, usage
tracking and billing software
- Systems Navigator - Data center management tools
- Presentation Navigator - Event logistics planning solutions
- Puppeteer u Provides database driven mail list and event
management software
- NetMovies™ - Delivers Intranet and Internet-based video-on-
demand, thereby protecting the contents IP

Perfect Order has leveraged their product partnerships and obtained
the following certifications, which have enabled them to attract a
Fortune 500 customer base:

- Wireless Networks- Cisco (Silver partner), Nokia (Gold)

- Systems- Sun Microsystems- Sun Strategic iForce Partner-
highest partnership level, Veritas (Elite), HPQ (Intel)

- Storage- Sun Storage Elite Partner- Charter member, Hitachi
Data Systems (Gold), Network Appliance (Gold), StorageTek
(Premier level partnership)

- Web Services- Sun Java Systems (Elite), Checkpoint- (Platinum
level), firewalls and security


Cisco is both a partner and customer. Perfect Order provides training to
Cisco employees in The Netherlands, Japan, and the US. The training is
in installing, configuring and operating both Broadband Access Centre
Cable (BACC) and Cisco Network Registration (CNR).

"Perfect Order delivers a strong combination of proprietary software,
process knowledge, and applications expertise," said John Hardy,
Chairman and CEO of Versatile, "layered on top of world class third
party IT products, that it can sell, implement and support. Perfect
Order's expertise in deploying enterprise application solutions within
an organization's four walls will complement Versatile's mobile
application software, providing the combined company with the unique
market position of automating the supply chain from the back office to
its furthest point, the mobile worker. In addition to this strategic
combination being accretive and significantly expanding our revenue, we
will also gain access to new vertical markets, as well as a robust sales
channel for our MobiquityO suite of software products."

"We are extremely pleased to align with such an innovative leader in the
mobile business solutions space," said John M. Gomery, President and CEO
of Perfect Order. "In the last few years, we have been making the
transition from selling, installing and supporting complex third party
software products within a tier one customer base, to deploying our own
proprietary suite of products. This acquisition will enable us to
accelerate our current growth plan across the US and internationally,
based in part on our expertise in broadband, local area and wide area
wireless. Versatile will also be able to leverage our expertise in
wireless networking and our ability to manage those networks in a secure
environment."

Pursuant to the terms of the transaction Versatile will pay $7.2 million
consisting of a cash payment of $3.0 million on closing and Promissory
Notes for $4.2 million, payable 12 months after the closing date. The
Vendors may convert up to one-half of their Promissory Notes, within 10
months of the Closing Date, into shares of the Company at the rate of
one common share for each $0.52 (CDN $0.65 per share) of the Promissory
Note. In addition, Versatile will issue 750,000 Common Share purchase
warrants (a "Warrant") to the Vendors if the Closing Date occurs before
the end of March 2005. One Warrant will entitle the holder thereof to
purchase one Common Share at the market price the day before the Closing
Date, for a period expiring 24 months after the Closing Date. The
Vendors have agreed to pay Versatile a break fee of $720,000. Closing
of the transaction is conditional upon customary closing conditions
including completion of due diligence, the definitive agreements and
requisite regulatory approvals.

Martin Wolf Securities LLC, San Ramon, CA advised Versatile in
connection with this transaction.

About Versatile Mobile Systems

Versatile Mobile Systems provides mobile business solutions that enable
companies to improve sales, marketing and distribution of their
products. By using Versatile Mobile's technology, over 300 companies in
the consumer packaged goods and transportation industries have gained
the benefits of supply chain visibility, shortened fulfillment cycles
and improved customer satisfaction. Versatile's international customer
list includes Cadbury Schweppes, Ocado, Albertsons, Michaels, Nordstrom,
Publix Supermarkets, K&L Distributors, Rug Doctor and Kellogg.
Additional information is available at www.versatilemobile.com

Forward-Looking Statements

This document may contain forward-looking statements relating to
Versatile Mobile Systems' operations or to the environment in which it
operates, which are based on Versatile Mobile Systems' operations,
estimates, forecasts and projections. These statements are not
guarantees of future performance and involve risks and uncertainties
that are difficult to predict or are beyond Versatile Mobile Systems'
control. A number of important factors including those set forth in
other public filings could cause actual outcomes and results to differ
materially from those expressed in these forward looking statements.
Consequently readers should not place any undue reliance on such
forward-looking statements. In addition, these forward looking
statements relate to the date on which they are made. Versatile Mobile
Systems disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Versatile Mobile Systems (Canada) Inc.
    John Hardy
    Chairman and CEO
    1-800-262-1633 or 001 425 778-8577 (from Europe)
    or
    Versatile Mobile Systems (Canada) Inc.
    Fraser Atkinson
    CFO
    (604) 683-2915, ext. 214
    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.