Systems America Executed Bank Letter of Interest for $7.5 Million Acquisition Financing From Wells Fargo Capital Finance
SAN RAMON, Calif., Oct. 8, 2012 (GLOBE NEWSWIRE) -- Systems America, Inc. (OTC:SYAI) ("Systems America" or the "Company"), a premier provider of cloud computing and information technology solutions, announced today that that it has received a letter from Wells Fargo Capital Finance ("Wells Fargo" ). Pursuant to this letter, Wells Fargo has proposed to provide Systems America a secured $7.5 million asset-based credit facility that would be used to acquire a specific targeted company. Upon execution of definitive documents, the credit facility is to be used to finance a specific acquisition of the Company. This proposed acquisition is an all cash transaction and non-dilutive to the Company shareholders at this time. Upon completion of the proposed acquisition and based on negotiated credit facility terms, the Company is expected to have consolidated pro forma revenues of $30 million and earnings of over $4.4 million for the fiscal year ending December 31, 2012.
As currently contemplated, borrowings under the credit facility would bear annual interest at variable market rates. This letter is non-binding and is subject to final due diligence and approval by Wells Fargo. The purpose of this letter of interest is to provide an approximate representation of the major terms and conditions. The Company anticipates completing of due diligence, legal documentation and closing on the facility in the next few weeks after satisfactory due diligence by Wells Fargo.
This potential acquisition company is a privately held provider of onsite consulting solutions, offsite delivery, and outsourcing focused on enterprise software, business intelligence and automation solutions from sales and customer service through supply management and logistics to a wide range of clients.
"This proposed new facility strengthens the Company's balance sheet and provides additional working capital to accommodate future growth," said Adesh Tyagi, Chief Executive Officer of Systems America. Adesh Tyagi further added that "We have successfully negotiated with this acquisition target company over the past few months. Based on our negotiations and organic growth, we can demonstrate improved operating cash flow, and are now poised to build upon this foundation going forward."
The Closing of the transaction is subject to certain conditions, including execution of a definitive acquisition agreement. There can be no assurance that the financing or acquisition will be consummated.
About Systems America
Systems America is a premier provider of diversified cloud computing and information technology solutions to commercial and government clients worldwide. We are ranked one of the fastest growing companies with multiple locations around the world. Systems America delivers superior cloud computing, information technology consulting services, and systems and integration services to hundreds of clients worldwide. Building on a core competency of efficient technology infrastructure outsourcing, the company is headquartered in San Ramon, California, United States. For additional information about Systems America, please visit http://www.systemsamerica.com.
The Systems America logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=14070
Forward-Looking Statements and Safe Harbor Statement:
The information provided herein may include forward-looking statements. These forward-looking statements may be identified by the use of terms and phrases such as "anticipates," "believes," "can," "could," "estimates," "expects," "forecasts," "intends," "anticipates", "may," "plans," "projects," "targets," "will," and similar expressions or variations of these terms and similar phrases. These forward-looking statements are largely based on our current expectations and projections about future events and financial trends affecting the financial condition of our business. Such forward-looking statements include, without limitation, projections about our possible future results, statements about our plans, strategies, business prospects, changes and trends in our business and the markets in which we operate. Additionally, statements concerning future matters such as new business models, new products, product enhancements, new technologies, sales levels, expense levels and other statements regarding matters that are not historical are forward-looking statements. Management cautions that these forward-looking statements relate to future events or our future financial performance and are subject to business, economic, regulatory and other risks and uncertainties, both known and unknown, that may cause actual results, levels of activity, performance or achievements of our business or our industry to be materially different from those expressed or implied by any forward-looking statements. Risks that may cause these forward-looking statements to be inaccurate include, among others, termination or suspension of the repurchase program, which may occur at any time, changes in the manner in which we implement the program, we may use substantially less than the full 80 million shares allocated under this repurchase program, fluctuations in the market price of our common stock. There is no certainty or assurance that any prospective events referenced as forward-looking statements will be achieved. The Company undertakes no duty to provide updates with respect to matters disclosed in this press release.
CONTACT: Press Contact: Systems America, Inc. Investor.Relations@systemsamerica.com
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