SUNNYVALE, Calif., March 2, 2010 (GLOBE NEWSWIRE) -- Symyx Technologies, Inc. (Nasdaq:SMMX) today announced its successful transition to a pure-play scientific software company with the completion of the planned divestiture of its High Productivity Research (HPR) business unit assets, previously announced on February 11, 2010. The divested assets will be owned and operated by FreeSlate, Inc. (formerly HPR Global, Inc.) in HPR's current location in Sunnyvale, California.
"This divestiture allows Symyx to operate as a focused, positive cash-flow software business, and to capitalize on its growth opportunities," said Isy Goldwasser, Symyx's chief executive officer. "As a pure-play scientific software company, we can better drive towards our core goals for 2010 of achieving the clear #1 position in the fast-growing electronic lab notebook market, of scaling our business and core franchises, and delivering consistent improvement in profitability, helping us track to our 20% adjusted EBITDA target for 2011."
"FreeSlate builds upon a tradition of enabling scientific R&D organizations to accelerate the pace of discovery while reducing costly, complex procedures that hinder efficiency," said John Senaldi, FreeSlate's chief executive officer. "As an independent, private company, we are excited to focus all our talent and energy on a singular purpose: enabling our broad, global customer base to achieve step-change gains in productivity and innovation. We are fortunate to have a committed, talented team with a track record of success and expertise in high-throughput experimentation."
The divestiture follows an extensive strategic evaluation and sales process in consultation with Symyx's financial advisors and consists of HPR's tools business assets and certain assets of Symyx's recently restructured contract research services operations. Under the divestiture agreement, Symyx transferred to FreeSlate, Inc., a newly formed company led by Mr. Senaldi, HPR's former president, substantially all existing HPR physical assets and certain intellectual property assets, including a portion of Symyx's patent portfolio and certain components of Symyx's Lab Execution and Analysis software suite. Mr. Senaldi resigned from Symyx prior to the signing of the divestiture agreement to lead the acquisition of HPR assets as founder and chief executive officer of FreeSlate.
As part of the divestiture, Symyx also provided approximately $8.6 million of positive net working capital (mostly in cash) at closing, receiving in return a $10.0 million note and common stock representing an approximately 19.5% equity interest in FreeSlate. Symyx retained all existing rights to royalties and licensing fees previously included in HPR, as well as relevant patents underlying these entitlements. Following the closing, FreeSlate hired substantially all Symyx employees previously in HPR. Symyx expects to conclude certain remaining legacy chemical research services contracts by the end of the second quarter of 2010. As a result of the divestiture and these actions, Symyx is concluding all of its HPR activities other than its ongoing license and royalty entitlements.
Non-GAAP Information
Symyx's calculation of Adjusted EBITDA excludes significant items that are generally non-recurring such as impairments, restructuring expenses, acquisition-related items, gains or losses from the sale of equity interests or businesses, and the tax effect associated with these items, interest and other income (expense), taxes, depreciation, amortization and stock-based compensation.
About Symyx
Symyx Technologies, Inc. (Nasdaq:SMMX) helps R&D-based companies in life sciences, chemicals, energy, and consumer and industrial products achieve breakthroughs in innovation, productivity, and return on investment. Symyx software and scientific databases power laboratories with the information that generates insight, enhances collaboration and drives productivity. Products include a market-leading electronic laboratory notebook, decision support software, chemical informatics and sourcing databases. Information about Symyx, including reports and other information filed by Symyx with the Securities and Exchange Commission, is available at www.symyx.com.
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Forward-Looking Statements
This news release contains forward-looking statements within the meaning of applicable securities laws under Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements, including statements about Symyx's core strategies and goals for fiscal 2010 and 2011 and completion of all chemical research contracts by the second quarter of fiscal 2010, are based upon Symyx's current expectations, and involve risks and uncertainties. Symyx's actual results could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation: (1) Symyx will be a smaller company in 2010, but may not be able to proportionately decrease its operating expenses, particularly as a public company, which may materially and adversely affect cash flows and profitability; (2) the divestiture poses significant operational and financial risks to Symyx that, if realized, could have a material adverse effect on its financial interests in the transaction and its customer relationships, which could in turn adversely affect Symyx's business, financial condition and results of operations; (3) continued material uncertainty in domestic and global economic conditions and in international financial markets have caused, and may continue to cause, customers to delay or cancel significant software investments or otherwise to reduce their business with Symyx; (4) Symyx may determine it is necessary to take measures to further reduce its operating expenses, incurring restructuring charges and cash outlays beyond those referenced above; (5) execution, sales, development, employee and customer retention and other risks inherent in restructuring and divestiture activities; (6) failure to expeditiously execute or to obtain customer acceptances under existing contracts in order to recognize committed revenue as planned; (7) inaccurate assessment of demand for existing and new offerings or failure to close new contracts with customers as forecasted; and (8) failure to transition customers to the company's Isentris platform and ELN products as quickly as estimated or to execute on software development roadmaps as planned. These and other risk factors are discussed under "Risk Factors" in Symyx's Annual Report on Form 10-K for the fiscal year ended December 31, 2009 filed with the Securities and Exchange Commission on February 26, 2010. Symyx expressly disclaims any obligation or undertaking to release publicly any updates or revisions to these forward-looking statements, except as the law may require.
Symyx is a registered trademark of Symyx Technologies, Inc. All rights reserved.