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Satnews Daily
April 22nd, 2015

International Datacasting Corporation To Sell Broadcast Products Business + Related Assets To Pico Digital Inc.

[SatNews] International Datacasting Corporation ("IDC") (TSX:IDC), a technology provider for the world's premiere broadcasters, today announced that it has executed a definitive agreement (the "Agreement") for the sale of IDC's broadcast products business and its related assets to Pico Digital Inc. ("Pico Digital"), a privately owned San Diego-based company providing multimedia delivery solutions to customers in the broadcast, cable, satellite, and broadband markets. The acquisition will include IDC's product portfolio, customers, and supplier relationships. It is expected that the majority of IDC's employees will join Pico Digital following the closing of the acquisition. The acquisition is expected to close prior to the end of June, 2015.  

In connection with the transaction, Pico Digital has committed to provide a US$1.0 million bridge financing facility to IDC, in exchange for which IDC expects to issue a promissory note and related security agreement in favor of Pico Digital.  

Certain IDC assets, including intellectual property, are excluded from the Agreement. In keeping with its previously announced strategic review, the Strategy Committee of the Board of Directors of IDC continues to explore the company's alternatives for the excluded assets. 

Under the terms of the Agreement, IDC will sell its assets to Pico Digital for total cash consideration of US$4.1 million (the "Purchase Price"), or approximately CAD $5.0 million at current exchange rates, subject to certain adjustments and holdbacks of up to US$1.35 million to satisfy certain performance conditions and any potential indemnity claims. The Purchase Price adjustments, if any, are linked to, among other things, net working capital at closing and company revenues and product sales during the post-closing period.

If IDC receives a bonafide superior offer to acquire all, or substantially all, of its assets, or at least 90 percent of IDC's outstanding common shares (a "Superior Proposal"), Pico Digital will have the right, for a period of seven business days, to match the Superior Proposal. If Pico Digital does not match the Superior Proposal, IDC may pay Pico Digital a termination fee of US$200,000 to terminate the Agreement and accept the Superior Proposal. 

Completion of the sale is subject to receipt of required shareholder and any required regulatory approvals. A shareholder meeting is expected to be held in June for shareholder review and consideration of the transaction. IDC expects to distribute the proceeds of the sale, net of transaction and ongoing costs, to shareholders.  

IDC will communicate further details regarding the meeting in a subsequent press release. A management information circular (the "Circular") providing further details with respect to the agreement will be provided to shareholders in advance of the meeting. Information on the anticipated amount and timing of distributions to shareholders will be included in the Circular. 

IDC expects to announce its fourth quarter and full year results of Fiscal 2015 on April 29, 2015 after market close.