20-20 to expand its European presence by acquiring its largest worldwide competitor

Manufacturing News, Source : The Manufacturer US
Published : 31 Jan 2008 8:56

20-20 Technologies has announced an agreement to acquire the Planit Fusion business from Planit Holdings limited

20-20 Technologies Inc., the world leader in 3D interior design and furniture manufacturing software, today announced an agreement has been signed and approved by 20 20 Technologies to acquire the Planit Fusion business from Planit Holdings Limited for an equivalent cash consideration of approximately US$38 million (£19 million) excluding related transaction costs. The transaction is expected to close on or before February 8, 2008. Given the pro forma numbers and taking into consideration potential synergies, integration costs and intangible amortization, 20-20 expects this transaction to be both cash flow and earnings accretive in the first year.

Planit Fusion is the retail design business of the United Kingdom-based Planit Holdings Limited. Planit Fusion offers interior design programs that combine innovative design features with essential sales management tools to provide total support for businesses, including kitchens, baths and bedrooms. Targeted for dealers, designers, retailers, homebuilders and remodelers, the Fusion products provide high quality graphical presentations and integrated front-end and ordering systems. The Fusion software is a welcome addition to 20-20’s already extensive product portfolio and 20-20 intends to maximize the benefit of this newly acquired asset.

With 2007 revenues of US$14.3 million, Planit Fusion’s revenue mix resembles 20-20’s own point-of-sale business. License sales account for 47% of Planit Fusion’s revenue, with maintenance licenses and services accounting for 37% and 16% respectively. Planit Fusion, formerly 20-20’s largest worldwide competitor, markets software products and services very similar to those of 20-20 and has ninety-eight (98) employees and fourteen (14) distributors active mainly in Europe. 20-20 will work very closely with each distributor in developing an even stronger partnership, leveraging 20-20’s and each distributor’s strengths in creating additional opportunities.

“Strategically, the acquisition will bring us a number of benefits beyond an immediate increase in market share,” said Jean Mignault, 20-20’s Co-Chairman of the Board and Chief Executive Officer. “The addition of Planit Fusion’s expertise and market knowledge will considerably strengthen our position in Europe. This bolstering of our European presence will help us maintain our growth and worldwide momentum.”

Approximately 90% of Planit Fusion’s revenues are generated in Europe. This acquisition further diversifies 20-20’s revenue stream, bringing European revenues to 40% of the Company’s total. Planit Fusion’s market share in key European countries is thus complementary to 20-20’s. In point-of-sale technologies, Planit Fusion is leading the U.K. market. It is also a leader in France, Spain and the Scandinavian countries. Planit fusion further commands a significant market share in Germany through its distributor.

“The acquisition of Planit Fusion will enhance the cross selling opportunities for our new products, namely point-of-sale desktops, and web solutions. Significant business synergies will result from our consolidation of catalog activities. We welcome the addition of specialized R&D and Catalog resources for our graphical retail systems. These new resources will not only bring additional expertise but will also enhance our professional services capabilities in Europe,” added Jean-Francois Grou, 20-20’s Chief Operating Officer.

“Given the similarity of our respective product lines, we do not expect any major issues with the integration of Planit Fusion into 20-20’s worldwide operations. Our combined customer base will be better served, and our opportunities for further expansion enhanced. On the strength of our market leadership in North America, this acquisition contributes in a significant way to our steady advancement towards leadership of the market in Europe and therefore in the world,” said Mr. Mignault.

Parallel to this acquisition, the Company concluded a credit agreement with a Canadian bank for a $25 million committed revolving credit line with a 5-year term.

TD Securities Inc. and Stikeman Elliott LLP are acting as financial and legal advisors to 20 20 Technologies Inc., respectively.

Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking information within the meaning of securities laws.

Implicit in this information, particularly in respect of future operating results and economic performance of the Company are assumptions regarding projected revenue and expenses. These assumptions, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual future operating results and economic performance of the Company are subject to a number of risks and uncertainties, including general economic, market and business conditions and could differ materially from what is currently expected.

Forward looking information contained in this report is based on management’s current estimates, expectations and projections, which management believes are reasonable as of the current date. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time unless required by applicable securities law.

About Planit Fusion

Planit Fusion provides world class photorealistic design software for the kitchen and bath industry. When designing with Planit Fusion software, the client chooses from among hundreds of catalogues from leading manufacturers of interior products. The retailer offers the consumer true representations of offices, living spaces, kitchens, bedrooms and bathrooms. Planit Fusion’s distribution networks and specialist sales teams cover all regions of the world.

About 20-20 Technologies Inc.

20-20 Technologies is the world's leading provider of computer-aided design, business and manufacturing software solutions tailored for the interior design and furniture industries. Dealers and retailers use its desktop and Web-based products and solutions for the residential and commercial markets. 20-20 also offers a unique proprietary end to end solution, integrating the entire breadth of functions in interior design through one platform. It provides a bridge between data communication from a point-of-sale to manufacturing and world-leading enterprise resource planning (ERP) systems, including computer-aided engineering and plant floor automation software. Operating in 13 countries with more than 500 employees, 20-20 is a publicly traded company (TWT) on the Toronto Stock Exchange (TSX).

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