OAKLAND, N.J., April 27 /PRNewswire-FirstCall/ — Media Sciences International, Inc. (Nasdaq: MSII) today entered into agreements to acquire Master Ink Company, Ltd., a China based manufacturer of toner cartridges, inkjet printer cartridges, inkjet refill kits and patented, next generation automatic ink refill systems. The agreement with Master Ink Company, Ltd. and its affiliates is to acquire substantially all of Master Ink’s assets including its People’s Republic of China based manufacturing facility.
Consideration for the acquisition includes $1.15 million in cash ($250,000 due at closing, the balance with accrued interest due on the second anniversary of the closing), a 10% override on Master Ink revenues until the note is repaid and one million shares of Media Sciences International common stock. The Company expects the acquisition to be accretive to its earnings in the first quarter following the close. Closing is expected to occur in early summer.
Media Sciences’ President and CEO Michael Levin commented, “This is a transformative acquisition for Media Sciences as it provides the Company with many strategic benefits that significantly increase our competitiveness. Specifically, the acquisition provides us with the lower cost manufacturing platform we have been seeking to develop, while increasing our ability to control quality and our intellectual property. In addition, we expect the acquisition to accelerate our time to market and increase our rate of new product development, while reducing new product capital expenditures. The acquisition provides the Company with the control and cost structure to develop more products more quickly, build quality into products instead of checking it after a product has been built, better manage our inventories, be more flexible to meet changing customer demands, pursue markets that have been otherwise impractical, and regain the operating leverage and cash generation that are inherent in this recurring business of printer supplies.”
Master Ink’s Key Highlights
Product Lines – Toner cartridges, inkjet refill kits and inkjet cartridges for postage machines
Capabilities – In house tool making, injection molding, wire forming, stamping and vacuum forming
Revenues – Approximately US$3 million
Gross Margins – Approximately 38%
Operating Expenses – Approximately US$1.1 million (pre-acquisition)
Employees – Approximately 140
Mr. Levin continued, “We have been working with Master Ink to develop tooling for a broad range of Media Sciences’ toner based products and as a result, upon closing we expect to enjoy an immediate reduction in the cost of our existing toner based product line. We are confident this acquisition will significantly improve our business model, and we look forward to concluding the acquisition in the coming months.”
The Company will include a discussion of the acquisition in its quarterly earnings conference call to be held on May 14, 2010.
Forward Looking Statements
This press release contains certain forward-looking statements about our goals and prospects within the meaning of the Private Securities Litigation Reform Act. These statements are based on management’s current beliefs and expectations about future events and financial trends that may affect our financial condition, results of operations, business strategy and financial needs and are subject to risks and uncertainties. Actual results may differ materially from those included or implied in these statements due to a variety of factors, including the risk that the acquisition will not proceed as anticipated or that certain pre-closing and post-closing adjustments to the terms and conditions will be needed, and those factors identified in our Annual Report on Form 10-K for the year ended June 30, 2009, on file with the Securities and Exchange Commission. Any forward-looking statements contained in this release speak only as of the time made and we assume no duty to update them, whether as a result of new information, unexpected events, future changes, or otherwise.
About the Company:
Media Sciences International, Inc. is the leading independent manufacturer of new build solid ink and color toner cartridges for office color printers. As the premium quality color toner and solid ink alternative to the printer manufacturer’s brand, Media Sciences’ 100% newly manufactured color toner and solid ink products for use in Dell®, Konica Minolta®, OKI®, Ricoh®, Samsung®, and Xerox® and many other color printers deliver significant savings when compared to the printer manufacturers brand.
Search for Media Sciences ink and toner cartridges at InkOasis.com
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