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MDI and Almana Networks International Announce Merger Agreement
Source: MDI Inc. 2009/8/17

MDI and Almana Networks International announced that they have entered into a merger agreement under which Almana will merge with MDI in an all-stock transaction. Almana is a privately held global technology and electronic security solution provider focusing on critical infrastructure, public safety and global commercial enterprise clients.

MDI and Almana Networks International announced that they have entered into a merger agreement under which Almana will merge with MDI in an all-stock transaction. Almana is a privately held global technology and electronic security solution provider focusing on critical infrastructure, public safety and global commercial enterprise clients.

Following completion of the merger, expected to close in the third quarter of 2009, MDI will adopt Almana's business strategy. The current directors, officers and employees of MDI will resign and waive their rights to any severance. Almana will select new directors and officers. As a condition to closing the transaction, a corporation owned by the resigning management of MDI will purchase from MDI its existing security systems and general contractor businesses and assume certain liabilities associated with those businesses. The purchasing corporation would pay MDI US$1 million by means of an unsecured convertible promissory note.


As part of the transaction, MDI will receive from the new shareholders a $5-million revolving line of credit. Additionally, Almana will immediately contribute seven contracts to MDI which are projected to result in a combined $8 million in revenue and an estimated $1.2 million in EBITDA for the last four months of 2009. For 2010, Almana has identified projects to be handled by MDI that are projected to provide approximately $61 million in revenue and $12 million in EBITDA.


It is anticipated that the transaction will enable MDI to reduce its corporate and SG&A expenses by approximately $3.6 million a year.


 

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