Zomax to Form Joint Venture in Ireland
May 09 2006 - 5:01PM
PR Newswire (US)
Zomax and MPO International Sign Definitive Agreement to
Consolidate Respective Ireland Manufacturing Operations
MINNEAPOLIS, MN, May 9, 2006 /PRNewswire-FirstCall/ -- Zomax
Incorporated (NASDAQ:ZOMX) today announced that it has signed a
definitive agreement to enter into a joint venture with MPO
International (MPO), a privately-held leader in the media
manufacturing and services industry. The joint venture will
consolidate the two companies' separate Ireland media replication
businesses, manufacturing operations and management teams into one
entity. This new joint venture does not include Zomax'
well-performing contact and program management center located in
Santry, Ireland. Zomax and MPO formed the joint venture to create
one profitable entity by capitalizing on the synergies that they
believe the two consolidated operations will create. This new
venture will support the existing media manufacturing needs of both
Zomax Limited's and MPO Ireland's clients. In addition, Zomax and
MPO intend to sign a strategic sales and marketing agreement to
pursue new growth opportunities, including leveraging the European
capabilities of MPO for production and fulfillment for Zomax
customers in the IT market segment and developing opportunities for
Zomax' contact center operations in Ireland with MPO's strong base
of entertainment customers within Europe. Under the terms of the
definitive joint venture agreement between MPO and Zomax, Zomax
will own 51% of the joint venture, with MPO owning the remaining
49%. Each company will contribute an undisclosed level of
manufacturing assets, inventory and cash to the joint venture.
Zomax will provide the general, financial and human resource
management leadership for the joint venture and MPO will assume
responsibility for sales, business development and technical
support for the venture. Closure of this transaction is subject to
final negotiation and execution of ancillary agreements, customary
due diligence and consents and is expected to occur within
approximately 45 days. "We believe that the successful execution of
this strategy will allow us to capitalize on our existing
investment in our Ireland operations and move the joint venture
quickly toward profitability," said Anthony Angelini, president and
CEO of Zomax. "As a result of significant synergies and leveraging
the best resources of both companies we believe the joint venture
can achieve profitability quickly and be cash positive in 2007.
Both Zomax and MPO have strong customer relationships and service
capabilities. We believe this new relationship creates a strong
platform for future, profitable growth both within Ireland and
across Europe." "We are excited to partner with Zomax and believe
that we can significantly strengthen our respective media
manufacturing operations in Ireland by consolidating them into one
entity," said Loic de Poix, president and CEO of MPO International.
"In addition, we believe that our unified organization can
successfully create new avenues for growth within the European
market." Zomax intends to consolidate its Ireland-based production
operations into MPO's existing production facility in the greater
Dublin area and to exercise a lease exit right in its Clondalkin
production facility. The closure of the Clondalkin facility is
expected to result in a cash restructuring charge of approximately
$1.8 million for lease exit costs and facility transition costs
that will be incurred over the balance of 2006. Based upon the
timeline for integration of the two entities, Zomax believes that
it can recoup these cash investments within 18 months. About Zomax
Zomax helps companies more efficiently bring their products and
content to market worldwide. Our comprehensive program management
approach helps companies develop, manage and improve their rapidly
changing product and program supply chains. Zomax' solutions
leverage a modular suite of supply chain services that include
project management, data management, customer contact and
e-commerce services, sourcing management, CD/DVD production,
assembly and kitting services, JIT physical and electronic
fulfillment and returns management. Founded in 1993, Zomax
currently operates 8 facilities across the United States, Canada,
Mexico and Ireland. For more information on Zomax, visit
http://www.zomax.com/ or call (866) 553-9393. About MPO
International MPO International is an independent business focused
primarily on pre-recorded media and stocking solutions for the home
entertainment industry. MPO is one of the Media Industry's
pioneers. With 1,500 employees in Europe and Asia, 6 production
sites and Fiege/MPO, a recent joint venture with a European leader
in logistics activities to provide distribution services for their
customers, the MPO group is the independent leader in pre-recorded
media and stocking solutions. It is headquartered in Averton,
France. http://www.mpointernational.com/ Forward-Looking Statements
Certain statements contained in this press release are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements relate to our expectations of future performance and
events including the anticipated closing and financial impact of
the Ireland joint venture and our ability to execute on our plans
for the Ireland joint venture related to integration and market
opportunities. These forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements to be materially
different from the results, performance or achievements expressed
or implied by the forward-looking statements. We caution that any
forward- looking statements made by us in this release or in other
announcements made by us are qualified by important factors that
could cause actual results to differ materially from those in the
forward-looking statements. These factors include, without
limitation, our ability to close the Ireland joint venture as
anticipated, which is subject to several significant contingencies,
and to execute on the related plans; the changes and volatility in
the personal computer hardware and software industry in Europe,
particularly with respect to the demand for CD and DVD media, from
which a significant portion of our Ireland revenues are derived;
macroeconomic factors that influence the demand for personal
computer hardware and software and the resulting demand for the
products and services offered through our Ireland operations;
consolidation among our customers or competitors, which could cause
disruption in our customer relationships or displacement of us as a
services provider to one or more customers; our ability to make the
proper strategic choices with respect to pursuing profitable growth
in our Ireland business; increased competition within our industry
and increased pricing pressure from our customers; our dependence
on relatively few customers for a majority of our revenues;
fluctuations in our operating results from quarter-to-quarter,
which are influenced by many factors outside of our control,
including variations in the demand for particular services we offer
or the content included in the products we produce for our
customers; the volatility of polycarbonate prices; and other risks
and uncertainties, including those identified and discussed in
detail under the caption "Risks and Uncertainties" in Item 1A of
our 2005 Form 10-K. We undertake no obligation to update or revise
any forward-looking statements we make in this release due to new
information or future events. Investors are advised to consult any
further disclosures we make on this subject in our filings with the
Securities and Exchange Commission, especially on Forms 10-K, 10-Q
and 8-K, in which we discuss in more detail various important
factors that could cause actual results to differ from expected or
historical results. DATASOURCE: Zomax Incorporated CONTACT: Anthony
Angelini, President and CEO, or Dick Barnes, EVP and CFO, both of
Zomax Incorporated, +1-763-553-9300; Xavier d'Estais, Marketing
Director of MPO International, +33 1 41 10 51 86; or Investor-Media
Contact, Douglas Sherk, CEO, or Jennifer Beugelmans, Senior Vice
President, +1-415-896-6820, or Media Contact, Steve DiMattia,
Senior VP, +1-646-277-8706, all of EVC Group, Inc. Web site:
http://www.zomax.com/ http://www.mpointernational.com/
Copyright
Zomax (NASDAQ:ZOMX)
Historical Stock Chart
From Jun 2024 to Jul 2024
Zomax (NASDAQ:ZOMX)
Historical Stock Chart
From Jul 2023 to Jul 2024