Orolia to Buy Digital Angel Unit Mcmurdo

Orolia, a high-technology group specializing in precise Positioning, Navigation and Timing, and Digital Angel, an advanced technology company in the field of animal identification and emergency identification solutions, announced that they have entered into a definitive agreement for Orolia to purchase McMurdo, a Digital Angel unit based in the United Kingdom, for $10 million cash.

Joseph J. Grillo, Digital Angel's Chief Executive Officer and President, said, "This transaction marks an important step towards focusing Digital Angel on a single core business, simultaneously giving us the ability to pay off our term debt and improve our working capital position. Digital Angel's Board of Directors and management team have made the strategic decision to focus the company on our Animal ID business, Destron Fearing, which we intend to grow both organically and by acquisition going forward."

Jean-Yves Courtois, Orolia's Chairman and Chief Executive Officer, said, "This acquisition represents continued execution of our growth strategy to acquire and build technology businesses in Positioning, Navigation and Timing.

"The addition of McMurdo to our portfolio of industry leading brands complements our recent acquisition of Kannad, a provider of positioning systems for extreme environments. With the combination of these businesses in our Positioning Systems Division, we believe that Kannad's strong presence in avionics segments and McMurdo's market leadership in location beacons in the maritime industry will provide significant opportunities to leverage distribution channels, build a strong division infrastructure and extend our reach in growth segments for positioning applications."

The key terms of the transaction are as follows:

- $10 million cash consideration

- $1.5 million to be held in escrow for up to 12 months to cover post-closing claims, warranties or indemnities

- Closing to take place upon satisfaction of closing conditions, targeted to be November 20

- Structured as a cash-free, debt-free sale of assets

"McMurdo's turnover was EUR10.8 million in 2008. We believe that this acquisition will be immediately accretive and should make a positive contribution to the cash flow of the Group," Courtois said.

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