VERTEX INTERACTIVE, INC. (OTCBB: VETX) today announced that it has entered into a definitive agreement, subject to certain conditions, to acquire Data Control Systems, Inc. of New Jersey ("DCS"), a leading provider of software-based, wireless inventory, order fulfillment, tracking, and warehouse management systems. During its fiscal year ended November 30, 1999, DCS, which is privately held, reported revenues of $8.6 million, and pro forma income from operations of approximately $2 million. The purchase price is $14.25 million, payable in cash at the closing. The acquisition will be immediately accretive to earnings and is expected to be completed during the current fiscal quarter ending March 31, 2000. The senior management team of DCS will continue in their respective positions.
The acquisition of DCS will represent, when completed, the third acquisition finalized by Vertex since September, 1999. The Company is implementing a strategic plan to grow internally and through accretive acquisitions. It is Vertex's goal to expand the revenues of DCS by more than 100% over the next 18 to 24 months by expanding sales of its newest wireless "Pick To Light" carts and order fulfillment systems in the United States and aggressively launching them throughout Europe.
DCS is a recognized leader in "Pick-to-light" order fulfillment systems, affording state-of-the-art warehouse management technology to assure among other things, the fastest and most accurate picking processes and fulfillment of customer orders, resulting in significantly higher worker productivity. This innovative approach to inventory management enables the companies using this technology to generate increased sales by responding, on an immediate "Just In Time" basis to the specific needs of the customer. DCS has an established roster of major corporate customers, including many of the major international pharmaceutical companies such as Merck and Pfizer, as well as Rite-Aid, Office Max, and IBM.
Tim Callahan, Vice President of DCS, stated, "We are very pleased to become part of the new Vertex. As a major provider of warehouse management systems in the U.S., we have established a position of leadership in significant vertical markets such as the pharmaceutical industry. Vertex's geographic reach from the U.S. into the heart of Europe, combined with their existing supply chain warehouse resource management products and web enabling technologies, will enable us to take the DCS product line to the next level, expanding into new industries and vertical markets both in the U.S. and particularly in Europe"
Nicholas Toms, Joint Chairman of Vertex stated, "We are very delighted to announce the agreement to acquire DCS, with its leading position in high-end industrial warehouse resource management. Their proven expertise and industry-wide reputation will strongly complement our existing products in this marketplace, both in North America and Europe providing the opportunity to expand our variety of services to clients on both continents. This acquisition of DCS will immediately enable Vertex to provide a broader range of enabling technologies for supply chain management and order fulfillment, including those over the Internet, and to further expand our market share. We welcome the people of DCS to Vertex Interactive and look forward to working with the DCS team to establish a leading position in a number of rapidly growing vertical markets."
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