On Track Innovations Ltd.
OTI Announces Completion of a Series of Strategic Acquisitions in China
Ad hoc announcement §15 WpHG
Strategic Acquisitions
OTI Announces Completion of a Series of Strategic Acquisitions in China
Ad hoc announcement processed and transmitted by DGAP.
The issuer is solely responsible for the content of this announcement.
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Fort Lee, NJ – August 15, 2005 – On Track Innovations Ltd, (OTI) (NASDAQ:
OTIV; Prime Standard [Frankfurt]: OT5), today announced that it has completed
a series of acquisitions in China in furtherance of its strategy to become the
world’s leading provider of contactless microprocessor-based smart card
solutions for payments, homeland security, and other applications. The
transactions will substantially increase OTI’s capacity to manufacture smart
cards, inlays for smart cards & electronic passports, and machinery for the
fabrication of such products. We anticipate that the increased capacity will
enable us to meet the rollouts and rapidly growing demand for our payments and
ID products. As a result, OTI expects to realize increase in gross margins.
In the first transaction, OTI purchased 100% of Pioneer Oriental
International, Ltd. (“POI”), a Hong Kong based manufacturer of smart cards,
inlays for smart cards & electronic passports, and machinery for the
fabrication of such products. The second transaction was for the acquisition
of 71.5% interest in e-Pilot Group Ltd., a Hong Kong based manufacturer of
inlays for smart cards & electronic passports and smart cards. In
consideration for these acquisitions, OTI issued an aggregate of 93,013 of its
ordinary shares.
Following its acquisition by OTI, POI acquired substantially all of the assets
of Pioneer Oriental Engineering Ltd. (“POE”), a Hong Kong-based producer of
smart cards, inlays for smart cards & electronic passports, and machinery for
the fabrication of such products. The purchase price that POI paid consisted
of 137,208 newly issued OTI ordinary shares.
As a fourth stage, OTI is establishing a company in which OTI holds 60%, that
will manufacture contactless smart cards, inlays for cards and electronic
passports, and machinery for the fabrication of these products.
OTI is currently in the process of integrating the newly acquired companies
into its global operations and bringing them into conformity with its
operational, quality control and financial reporting standards. OTI
anticipates that, as a result of the acquisitions described above, its
production capacity will increase to as much as 6 million units per month by
the second half of 2006.
On Track Innovations Ltd.
Z.H.R. Industrial Zone
12000 P.O. Box 32 Rosh Pina
Israel
ISIN: IL0010834682
WKN: 924895
Listed: Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin-
Bremen, Düsseldorf, Hannover, München und Stuttgart
End of ad hoc announcement (c)DGAP 16.08.2005
Issuer’s information/explanatory remarks concerning this ad hoc announcement:
In commenting on these acquisitions, Oded Bashan, President & CEO of OTI
stated that “The growing demand for our products has resulted in a strategic
decision to take greater control of the manufacturing process, enabling us to
ensure our ability to meet this demand on a timely and stable basis and to
improve our gross margins. The transactions that we announce today represent
the implementation of this strategy. Such transactions also enable us to
provide both ourselves and unrelated third parties with unique machinery for
the production of cards, inlays for cards and electronic passports. We will,
if necessary be able to quickly build local manufacturing capabilities
according to specific project requirements.”
About OTI
Established in 1990, OTI (NASDAQ: OTIV, Prime Standard: OT5) designs, develops
and markets secure contactless microprocessor-based smart card technology to
address the needs of a wide variety of markets. Applications developed by OTI
include product solutions for petroleum payment systems, homeland security
solutions, electronic passports and IDs, micro payments, mass transit
ticketing, parking, loyalty programs and secure campuses. OTI has a global
network of regional offices to market and support its products. The company
was awarded the prestigious ESCAT Award for smart card innovation in both 1998
and 2000. For more information on OTI, visit http://www.otiglobal.com
This press release contains forward-looking statements including statements as
to what we anticipate and expect and to increases in our production capacity.
Such statements are subject to certain risks and uncertainties, such as
market acceptance of new products and our ability to execute production on
orders, which could cause actual results to differ materially from those in
the statements included in this press release. Although OTI believes that the
expectations reflected in such forward-looking statements are based on
reasonable assumptions, it can give no assurance that its expectations will be
achieved. OTI disclaims any intention or obligation to update or revise any
forward-looking statements, which speak only as of the date hereof, whether as
a result of new information, future events or otherwise. results could differ
materially from expected results. OTI undertakes no obligation to update
forward-looking statements to reflect subsequently occurring events or
circumstances.
OTI Contact: Media Relations IR Contact:
Galit Mendelson Adam Handelsman Paul Holm
Director of Corporate
Communication 5W Public Relations PMH Group
201 944 5200 ext. 111 212 999 5585 212 496 7238
galit@otiglobal.com ahandelsman@5wpr.com pmhgroupinc@aol.com
End of message (c)DGAP
162001 Aug 05
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