March Networks to acquire Cieffe

Published 5 February 2008

Canadian provider of intelligent IP video acquires innovative designer of award-winning IP video surveillance solutions; acquisition will expand March Networks’ European presence

Ah, Milan: La Scala, San Siro, Galleria Vittorio Emanuele, AC Milan, Inter, Slivio Berlusconi. Ottawa, Canada-based March Networks (TSX: MN; AIM: MNW), a leading provider of intelligent IP video and business analysis applications, found another reason to go the beautiful city on the plains of Lombardy — to enter into a definitive agreement to acquire Cieffe S.p.A. and its related company Insignis Technologies S.r.l. Milan-based Cieffe develops high performance IP video surveillance solutions used by enterprise-class organizations in Europe, the Middle East, and Asia Pacific. Cieffe has a name for innovative design and advanced functionality, and its products are used by leading European financial institutions and a number of high profile airport, government and commercial industrial clients. Cieffe’s calendar 2007 revenue is estimated at €10 million. Cieffe’s pretax profit for the ten months ending 31 October 2007 was approximately €400,000 and its net asset position at 31 October 2007 was approximately €1.5 million.

Cieffe offers a portfolio of interoperable encoders, IP and megapixel cameras, video analytics, and advanced video management software has received numerous industry recognitions, including two consecutive best-of-show awards at IFSEC, Europe’s most prestigious security industry events. The company showed the world’s first Megapixel Speed Dome camera at IIPSEC 2008 which was held at Stoneleigh Park, Coventry, United Kingdom in late January.

The agreement calls for the payment by March Networks of €14.0 million in cash and €6.0 million in common shares for a total purchase price of €20.00 million plus an earn-out component of up to €10.0 million in cash. The agreement is subject to customary closing conditions and is expected to close by the end of March 2008. Cieffe’s founder and CEO, Fabrizio Colciago, will continue as managing director. “This is a strategic acquisition for March Networks that significantly strengthens our presence in the EMEA region as well as in the high-growth commercial industrial segment,” said Peter Strom, president and CEO of March Networks. “Cieffe’s innovative product portfolio complements March Networks’ existing solutions and enhances our position as a global supplier of comprehensive, open IP video management solutions.”