Zaio Corporation (TSX-V:ZAO) announced today that it has entered into a definitive agreement to acquire the assets of Realink Corporation, a privately held company with offices in Tempe, Arizona. Realink operates two divisions that provide services to the appraisal and mortgage banking industries. The assets are valued at US$3.4 million.
Under the terms of the deal, Zaio will issue 1,978,000 common shares and 2.5 million warrants allowing the holder to purchase the same number of common shares at a price of $3.08 per share. The warrants expire on December 31, 2007. The number of shares was determined based on 85% of the average closing price of Zaio shares since March 2, 2007 and an exchange rate of $1.17. The transaction is expected to close, subject to receipt of all regulatory approvals including the TSX Venture Exchange, within the next 45 days.
"Zaio's primary goal is to build out its network of appraisers as quickly as possible in order to satisfy the needs of lenders and 11 other targeted market segments with our 'instant' valuation solution," stated Thomas J. Inserra, chief executive officer of Zaio Corporation.
"Realink provides us with highly skilled and experienced professionals with great technological expertise in our industry and proven technical support, customer service skills and other needed capabilities. The acquisition also provides us with a viable method for accelerating the introduction of our services to lenders as we expand our geographic coverage throughout the US."
The United Systems Software division of Realink is the nation's oldest appraisal technology company and has relationships with 4,000 appraisers across the country. It was the first appraisal software company to sign an agreement with Fannie Mae for online appraisals. Access to Realink's 4,000 appraiser relationships will help accelerate Zaio's national expansion and assist the company with overcoming the challenge of matching its internal infrastructure growth with the rapid customer and sales expansion of the business. A benefit to Zaio's customers and existing network of Zone appraisers is expected as the integration of Realink's technology occurs throughout 2007.
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"Based on year-end 2006 financial performance of each business, we expect the combined operations to generate revenues of about $12,000,000 in 2007," said Rodney Mitton, chief financial officer of Zaio. "After closing, three large private equity firms, which had been Realink shareholders, will become shareholders of Zaio. These firms on an aggregate basis will hold about 6% of Zaio's outstanding shares, but are the first known institutional-grade investors in Zaio's stock."
About Zaio
Zaio is the only known company in the world that develops and maintains a site-verified database of photos, valuations and property information of virtually every property in entire cities, using a proprietary "GeoScore" property rating system. Zaio and its network of premiere, local appraiser experts photograph and appraise entire cities, one building at a time from the street.
About Realink
Realink Corporation is a privately-held electronic commerce company with two software technology divisions providing appraisal software to licensed appraisers and appraisal services to the mortgage banking industry. Realink is a national provider of real estate appraisal and settlement services focusing on service and technology solutions that reduce cycle time and costs associated with evaluating property risks and closing transactions.
Zaio is a public corporation that trades under the symbol "ZAO" on the TSX-V Exchange in Canada. Additional information is available for US investors under the symbol "ZAOFF".
For investors who would like to be added to Zaio's investor distribution list, please contact Collum Hunter at chunter@christensenir.com.
SOURCE Zaio Corporation
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