Cognicase and National Bank of Canada create a new force in electronic business solutions
Montreal, 2 February 2000 -
COGNICASE Inc. (COG-T; COGI-NASDAQ) and National Bank of Canada (NA-T) announced today that they have entered into an agreement in principle for COGNICASE to acquire all the shares of SIBN Inc., National Bank's IT subsidiary. National Bank is also investing C$20 million in treasury shares of COGNICASE. In total, COGNICASE will issue to National Bank approximately 9.29 million common shares, representing 35% of the shares of the Corporation, on a fully diluted basis and after such issue, making National Bank the largest shareholder of COGNICASE. This transaction is valued at approximately C$232 million, based on a price of $25 per share.
COGNICASE will become the preferred IT supplier of the Bank and its affiliates for a period of ten years. COGNICASE estimates the existing SIBN business could represent some C$1.2 billion in revenues over the ten year period.
"This strategic partnership with the National Bank and its affiliates provides COGNICASE with a powerful position in the market for end-to-end electronic business solutions," said Ronald Brisebois, President and Chief Executive Officer of COGNICASE. "We are pleased to welcome into this new partnership the 900 employees of the National Bank who work for SIBN and its affiliated companies. The combined entities will have a significantly increased presence in financial services, telecommunications, utilities and government market sectors in Canada, the United States and around the world."
"National Bank considers e-commerce as a strategic imperative in the delivery of financial services to its client base," said Réal Raymond, President, Personal and Commercial Bank at the National Bank. "Through its expertise in e-commerce, COGNICASE will become a key component of this strategy."
As part of the transaction, National Bank and the holding company controlled by Ronald Brisebois, which together will represent some 43% of all issued and outstanding shares of COGNICASE on a fully diluted basis, have agreed to transfer all of their direct and indirect holdings of COGNICASE into a separate holding company. As the sole shareholders of that company, both parties will enter into a Shareholders Agreement that will provide for the manner of voting of the shares of the Corporation held by it.
Completion of the transaction is expected by May 2000 and is subject to: approvals by the Boards of Directors of COGNICASE and of the National Bank; delivery by the financial advisor to COGNICASE of a fairness opinion confirming the transaction is fair from a financial point of view to the shareholders of COGNICASE; the approval of COGNICASE shareholders at a special meeting to be called for this purpose; satisfactory due diligence by both parties; and the receipt of all required shareholder and regulatory approvals, including that of the Office of the Superintendent of Financial Institutions.
National Bank of Canada is an integrated financial group whose mission is to provide comprehensive financial services to consumers, small and medium-sized enterprises and large corporations in its core market, while offering specialized services to its clients elsewhere in the world.
The National Bank offers a full array of banking services, including all the investment banking services required by large corporations. It is an active player on international capital markets and, through its subsidiaries, is involved in securities brokerage, insurance and wealth management as well as mutual fund and retirement plan management.
Ranking sixth among Canada's chartered banks, the National Bank is the leading banking institution in Quebec and the bank of choice for independent businesses. It has branches in every province of Canada. Through its representative offices, subsidiaries and alliances, it is also represented in the United States, Europe and elsewhere in the world.
Its assets now exceed $70 billion and, together with its subsidiaries, it employs over 17,000 people. The Bank's head office is in Montreal and its shares are listed on the Toronto Stock Exchange.
SIBN was established in 1995 as a wholly owned subsidiary of the National Bank of Canada. It specializes in secure, highly functional solutions for business management and for customer-supplier relations. It operates in a range of fields, including Web-based e-payment, treasury measurement systems, human resources and payroll. SIBN also offers information technology consulting services.
COGNICASE is among the North American leaders in the implementation of business solutions that leverage information technology, with offices in several major North American and European business centers. Based on its pragmatic approach, productivity tools, international IT engineering and hosting center and critical mass of business and technology expertise, COGNICASE offers innovative solutions that contribute to the success of its customers. Its solutions include: implementation of turnkey e-business solutions, ASP functions, re-engineering of existing applications for e-business, technology configuration management, as well as project management and business process improvement consulting services.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (US), which involve risks and uncertainties. As a result of a number of factors, including factors that COGNICASE may not currently foresee, COGNICASE's actual results could differ materially from those set forth in the forward-looking statements. Certain other factors that might cause COGNICASE's actual results to differ materially from the forward-looking statements include the Company's ability to (i) successfully develop additional products and services and new applications for its existing products and services and otherwise respond to rapid changes in technology, (ii) successfully compete in its industry for customers and developers and other personnel with expertise in information technology, (iii) successfully identify and consummate acquisitions on favorable terms and integrate acquired businesses, and (iv) successfully manage its growth and changing business, as well as those factors set forth under the heading "Risk Factors" COGNICASE's 1999 annual report.
President and Chief Executive Officer
Web site: www.cognicase.com
Banque Nationale du Canada
Senior Manager, Public Relations Department
Banque Nationale du Canada
Director, Investor Relations