NEW YORK, June 2, 2004 (PRIMEZONE) -- Advanced Communications Technologies Inc. (OTCBB:ADVC) (the "Company") today announced that on May 27, 2004 it entered into an acquisition agreement to purchase 100 percent of the assets and core business of Cyber-Test Inc. (the "Asset Purchase Agreement") ("Cyber-Test"), an established privately held electronic equipment repair company with annual revenues of approximately $6 million. The Company has formed Encompass Group Affiliates Inc. ("Encompass Group"), a new, wholly owned subsidiary to become the direct parent of Cyber-Test.
Under the terms of the Asset Purchase Agreement between Cyber-Test and Encompass Group, Encompass Group will acquire all of the operating assets, tangible and intangible property, rights and licenses, good-will and business of Cyber-Test, for a total purchase price consisting of $3,000,000 in cash, $500,000 in a three year unsecured installment note and 50,000,000 shares of restricted company common stock priced at $.01 per share to be earned prorata over a three year period based on Cyber-Test meeting certain revenue and earning milestones.
Wayne Danson, the Company's President and Chief Financial Officer commented on the acquisition by saying, "The Cyber-Test acquisition is the first of what we hope to be a series of acquisitions intended to create a vertically integrated service and technology business for the company. Further details of this strategy will be forthcoming."
Lisa Welton, President and Chief Executive Officer of Cyber-Test, and her management team will remain with Cyber-Test in the same capacity. Welton has been with the company since 1992. Since that time, Welton has driven the company to be one of the nation's leaders in computer peripheral repair and service.
When asked to describe Cyber-Test Welton replied, "Cyber-Test has been and continues to be on the leading edge of repair and exchange for most super store retailers that sell computer equipment. In addition to the company's hardware repair services, it offers a multitude of services and support for manufacturers and any company needing a service arm to accompany its product offering."
Welton added, "We are extremely excited to be the first part of this anticipated new group of companies and together will be able to offer services that our existing and new clients will take advantage of immediately." Welton will also assume a management role with Encompass Group.
Danson said, "Today is the beginning of a new Advanced Communications. The agreement with Cyber-Test, when combined with our existing revenues and our other expansion plans, firmly establishes the company as a revenue-generating platform for growth in the technology and other industries."
Danson continued, "We are particularly pleased with the increased value that was created today for our shareholders, and incredibly enthused about this transaction and the talented people that it brings to the company."
Danson will remain President and Chief Financial Officer of the Company, and will take on the role of Chairman of the Board of Directors of Encompass Group.
In addition to the acquisition of Cyber-Test, Encompass Group signed an agreement with Hy-Tech Technology Group Inc. (OTCBB:HYTT) ("Hy-Tech") to acquire certain licensing rights to Hy-Tech's customers and website addresses, the transfer of rights which Hy-Tech had to negotiate an acquisition with Cyber-Test as well as certain other acquisitions, and the right to hire Martin Nielson, the Chief Executive Officer of Hy-Tech. Hy-Tech has been a custom systems builder and an authorized distributor of the world's leading computer components and peripherals. Under the terms of the agreement between Hy-Tech and Encompass Group, Encompass Group will have, among other benefits, an exclusive, perpetual worldwide license to market to Hy-Tech's customer base. The consideration paid for these rights consists solely of the retirement of certain of Hy-Tech's Senior Secured Convertible Debentures by the payment of $250,000 and the issuance of the Company's Series B Convertible Preferred Stock with a liquidation preference of $253,000.
The transactions with Cyber-Test and Hy-Tech are subject to customary conditions to closing, but are expected to close on or before June 8, 2004.
In conjunction with these transactions, the Company intends to appoint Martin Nielson as Chief Executive Officer of Encompass Group. Nielson will also become Senior Vice President-Acquisitions of the Company and a member of the Board of Directors. Nielson, who sought out the original deal with Cyber-Test, is an experienced business builder who will work with Danson and Welton to craft and execute the growth of the company, Encompass Group and Cyber-Test. Nielson's 30-year international career includes serving as Chief Executive Officer and in other executive-level positions within public and private companies. Five start-ups, in which he served as an executive, became public on the NYSE, NASDAQ, OTCBB and London exchanges, and four became billion dollar corporations, among them The Gap, Businessland and Corporate Express.
Nielson commented on the transactions by saying, "I'm thrilled to be joining forces with Wayne (Danson) and Lisa (Welton) and look forward to implementing the plan we have begun to develop. I am very optimistic about what we can achieve together, given the business and finance experience that the collective management team has."
When asked about the future position of Advanced Communications Danson said, "We now have a successful start to the growth of our core operating business in the service and repair of electronic equipment, which will give us the ability to expand into the complimentary field of computer components and peripherals distribution. Combined with our investment in Yorkville Advisors made earlier this year, we have, over a short time frame, transformed the company into a financially stable growing business. We are happy to gain the support of Lisa (Welton) and Martie (Nielson), two highly regarded industry professionals, and are excited about the proven management skills and dynamics they bring to the Company."
The Company intends to continue expanding its core operating business by acquiring additional complimentary business enterprises during the second half of this year.
About Cyber-Test Inc.
Cyber-Test Inc. ("Cyber-Test"), a Florida-based privately held corporation with 85 employees, is an established electronic equipment repair company. Specializing in the repair of computer peripheral products, Cyber-Test is uniquely positioned as a strategic partner for OEMs (Original Equipment Manufacturers), warranty companies, dealers and end-users. The versatile Cyber-Test service model enables its customers to support virtually any electronic product. Cyber-Test provides a multitude of services that offer service support at any level from repair or warranty exchange, to end-of-life product support. Cyber-Test offers the flexibility to deliver exactly what its customers need. Whether it is to outsource entire service departments, or just choose one of the many services offered, Cyber-Test can provide a multitude of service infrastructures to fit the needs of its clients. Cyber-Test's menu of services includes: i) Call Center/Help Desk; ii) Depot Repair; iii) New Product Sales; iv) Parts Sales; v) Spare Parts Sales; vi) Advance Exchange; vii) Product Return and Warranty Support; viii) Service Contract Billing and Administration; ix) Logistics; x) Detailed Tracking Analysis and Service Data Analysis; and xi) Exit Strategy and End-of-Life Product Support.
Current customers of Cyber-Test include national and regional reinsurance companies and major office and electronic retail super stores.
About Advanced Communications Technologies Inc.
Advanced Communications Technologies Inc. (the "Company") is a holding company that, through its wholly owned subsidiary, Encompass Group Affiliates Inc. ("Encompass Group"), owns Cyber-Test Inc., an established electronic equipment repair company. In addition, and also through Encompass Group, the Company holds certain licensing rights to the customers and website addresses of Hy-Tech Technology Group Inc., a custom systems builder and authorized distributor of the world's leading computer components and peripherals. The Company also has a minority interest in Yorkville Advisors Management, LLC, an investment management partnership, through its wholly owned subsidiary Hudson Street Investments Inc.
This release contains 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934. Although the Company believes that the expectations reflected in such statements are reasonable, no assurances can be given that they will prove correct. The Company remains exposed to risk factors outlined in the Company's Registration Statement as filed with the Securities and Exchange Commission on July 16, 2003. Statements made herein are not a guarantee of future corporate or stock performance.
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