Intrinsyc to buy Destinator’s GPS-related assets and patents for CDN$8.5m

Intrinsyc to buy Destinator’s GPS-related assets and patents for CDN$8.5m

The acquisition is subject to customary closing conditions as well as court administered restructuring proceedings in the US and Canada involving Destinator and certain of its affiliates, and is expected to take six to eight weeks to complete.

The assets involved include a wireless software development centre in Beijing (China), a development centre in Herzliya (Israel), existing navigation and wireless software products and seventeen patents granted or pending.

Intrinsyc plans to integrate these technical operations, as well as selected key personnel in other functions, within the existing Intrinsyc leadership structure.

"This transaction delivers critical engineering and development resources that will lower Soleus development costs and increase engineering capacity that will accelerate Intrinsyc's growth as a wireless software solution provider," said Glenda Dorchak, chairman & CEO of Intrinsyc Software. "With the acceleration of the transition from standalone PNDs to navigation in wireless phones and connected PNDs, we see a tremendous opportunity to marry [Destinator's] navigation technology with our Soleus software such that it will increase our addressable market and accelerate Intrinsyc's wireless software revenues."

Destinator navigation software is compatible with all major operating systems and can be easily customised to work on any hardware vendor's platform across the Windows® Embedded CE, Windows Mobile®, Symbian® and Linux operating systems.

Under the terms of the transaction, Intrinsyc will pay CDN $8.5 million in cash or assume of liabilities of Destinator, as well as issue eleven million Intrinsyc common shares from treasury. All common shares issued pursuant to this transaction will be subject to a six-month lock-up agreement.

To assist Destinator in meeting its working capital requirements during the restructuring process, prior to the close of the transaction, Intrinsyc will advance up to US$2 million to Destinator in the form of debtor in possession interest-bearing financing secured by a court-ordered super-priority charge on Destinator's Canadian and US assets. This amount will be credited against the purchase price on closing or repaid from the proceeds of sale should Intrinsyc not be the successful bidder.

The acquisition is subject to higher bids to be solicited in an auction process (in which Intrinsyc may participate) that will be administered by the courts in Canada and the US overseeing Destinator's restructuring process.

If unsuccessful in its offer, Intrinsyc is eligible to receive a break fee equal to 3% of the purchase price and the reimbursement of certain transaction-related expenses.

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