DDi announces agreement to acquire Coretec

ANAHEIM, USA & TORONTO, CANADA: DDi Corp. and Coretec Inc., both leading providers of technologically advanced printed circuit board (PCB) engineering and manufacturing services, announced today that they have entered into a definitive agreement, pursuant to which DDi will acquire Coretec for approximately CDN $25.2 million ($23.5 million), comprised of approximately CDN $7.4 million in cash for Coretec’s common stock and the assumption of CDN $17.8 million of Coretec debt outstanding as of September 30, 2009.

The Coretec debt assumed includes approximately CDN $12.7 million related to long term facilities secured by property and equipment, and CDN $5.1 million pursuant to the working capital revolver credit facility. The combined company will benefit from DDi’s financial strength, including DDi’s $25.6 million of cash on hand as of September 30, 2009.

The acquisition will be effected by way of a plan of arrangement under the Business Corporations Act (Ontario). Under the Arrangement, Coretec shareholders will receive CDN $0.38 per Coretec common share.

This price represents a premium of approximately 100% to the 20 day volume weighted average price of Coretec common shares on the Toronto Stock Exchange through November 23, 2009, and represents a 12 percent increase in the total enterprise value of Coretec when compared to the CDN $0.20 per share proposal that DDi publicly announced on October 26, 2009.

Coretec’s revenues over the 12 months ending September 30, 2009 were approximately CDN $77.2 million. The companies will implement a restructuring plan immediately after the transaction closes that is currently estimated to generate US $8 million in annual cost savings.

Mikel H. Williams, DDi’s President and Chief Executive Officer said: "DDi and Coretec are two of the leading PCB manufacturers in the North American market and share a similar vision and strategy. We believe that a combined organization will strengthen our position in the market, extend our capability to support our collective customers and will be beneficial to our shareholders.

"Our plans include a full integration of our respective Toronto operations to create a world class facility with solid customer demand. The combined company will be well positioned to effect an orderly Toronto integration to ensure minimal, if any, customer disruption. Further, we will integrate our sales, general and administrative functions.

"The addition of Coretec’s two US facilities will extend our presence in the strategic military/aerospace marketplace and deepen our flex and rigid-flex product capabilities. As with the successful acquisition of Sovereign Circuits, we plan to leverage these facilities’ capabilities into the market with our large sales organization and customer base.

"In addition to the annual operational cost savings resulting from the combination, we see capital expenditure synergies as we drive improved utilization of the combined operating assets."

Speaking on behalf of Coretec, Paul Langston, President and Chief Executive Officer, stated: “The opportunity to combine Coretec with DDi, given their presence in Toronto and complementary strategy and operational focus, is compelling for our customers, employees and shareholders.

"The combination allows the company to drive significant operational and market based synergies and is a natural fit. We look forward to working to close the transaction expeditiously and will continue to support our collective customers with market leading technical, engineering and customer service capabilities.”

DDi has been advised in the transaction by Mooreland Partners LLC.