Xenos Group Inc. has signed a definitive purchase agreement with XML-Global Technologies, Inc. to acquire all of the business assets of XML-Global Technologies, Inc, a software developer and vendor of XML middleware products with operations in Vancouver, Canada. Xenos will acquire XML Global's intellectual property, customer relationships, and operating assets and will retain all employees. XML Global's GoXML eBusiness product line is a set of modular solutions for data transformation, communication and storage of structured data for e-business requirements, written entirely in the Java language.
The terms of the transaction call for Xenos to pay $1,250,000 and to issue 1,000,000 common shares to XML Global in exchange for the purchased assets, including the GoXML eBusiness product line. Xenos will provide a price guarantee on the Xenos shares to XML Global such that Xenos under certain conditions may make additional cash payments to XML Global. It is anticipated that this acquisition will be accretive to Xenos' top line and to EBITDA in fiscal 2004.
XML Global has agreed to pay Xenos a cancellation fee of $500,000 in the event that prior to closing it receives an alternative bid for the business that it decides to accept. The transaction is subject to all requisite regulatory approvals and the approval of XML Global's shareholders. A majority of XML Global shareholders have agreed to vote in favour of the transaction. Closing is expected to occur before the end of October, 2003. Xenos and XML Global have entered into a co-marketing agreement allowing Xenos to market and sell XML Global's products and services prior to the completion of the acquisition.