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OSI signs letter of intent to acquire U.S. company with major defense contracts; would double size of OSI
Vancouver, Canada -- Offshore Systems International Ltd. (TSX: OSI/ OTCBB: OFSYF) today announced it has signed a non-binding letter of intent to acquire a United States defense contracting company. The acquisition is expected to be accretive, and to approximately double OSI’s revenue and employee base. The target company, with multiple offices in the United States, is a supplier of technology and services to the U.S. Department of Defense and key defense prime contractors.
“We said a critical milestone for 2005 was to grow OSI through acquisitions,” said President and CEO, John Jacobson. “We also said the U.S. market was a key target. This new company is complementary to our Applications business. We expect it will greatly expand our revenue opportunities, be accretive to earnings, and give us access to one of the largest security and defense markets in the world.” Jacobson added OSI would also benefit because the new company is a growing, profitable, services-based business with historically lower revenue variability than OSI’s navigation business.
This newest announcement closely follows the company’s first U.S. acquisition in April 2005 of Mapcon Mapping Consultants in Salt Lake City, Utah. OSI completed a financing of CDN$19.5 million, also in April, to support the company’s rapid growth.
“We believe the market opportunity for our products is considerable,” said Jacobson, “and we are becoming a larger company to capitalize on this significant potential. Our goal is to become the ‘go to’ company in the defense and intelligence communities for geographic technology.”
With the letter of intent in place, OSI said it plans to proceed to due diligence and the development of definitive purchase and sale agreements immediately. The acquisition is expected to close by September 30, 2005, subject to the satisfactory conclusion of due diligence, approval by the board of directors of both companies, the shareholders of the target company, and regulatory approval.
About Offshore Systems International Limited
Offshore Systems International Ltd. (OSI) makes computer-based geospatial intelligence software, systems and data products mainly for large government and civilian customers. The company has three business units: OSI Navigation Systems (moving map display systems and software for naval surface ships and submarines); OSI Applications (network-based map and target display software and services for national defence) and Mapcon Mapping (digital map data production services for civilian customers). OSI’s common shares are listed for trading on the Toronto Stock Exchange (TSX: OSI) and the OTC Bulletin Board (OTCBB: OFSYF). Visit OSI’s website at www.osil.com for more information and the latest Company updates.
Forward-Looking Statements
This news release contains items that constitute forward-looking statements within the meaning of securities laws including Section 27a of the Securities Act of 1933, as amended, and Section 21e of the Securities Exchange Act of 1934, as amended. These statements are made under the ‘safe harbour’ provisions of the Private Securities Litigation Reform Act of 1995 and, as such, involve known and unknown risks and uncertainties and other factors that may cause the actualresults to be materially different from the results implied herein. These include the risks that key consents and assignments of key contracts will not be obtained; that OSI is unable to negotiate a satisfactory definitive agreement with the vendor and with key members of management; and the risk that due diligence is not completed to OSI’s satisfaction. Offshore Systems International can give no assurances that its representations will be achieved or that it will update them at any time in the future.
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Jane Hayward
Investor Relations |
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| Phone: (613) 287-0462 |
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