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CSG enters dealership agreement with Canon Australia
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$40 million underwritten institutional placement and non underwritten share purchase plan
CSG Limited (“CSG”) announces that it has entered into agreements with Canon Australia (“Canon”) to become a Canon Multi-Function Device (“MFD”) dealer in Sydney, Melbourne, Canberra, Adelaide and Perth. As part of the new agreements, CSG has also acquired sub-contractor rights over an existing portfolio of approximately 10,500 Canon MFD’s.
The existing customer contracts to be sub-contracted to CSG operate under multi-year contracts and CSG will acquire other existing infrastructure to enable the customers be serviced immediately. The total consideration will occur in instalments. The first instalment of $6 million will be paid on 1 July 2010 with the balance paid over two years.
Rationale
The transaction with Canon is consistent with CSG’s stated long-term growth strategy for its Print Services business in Australia. The transaction presents CSG Print Services with an exciting opportunity to extend its long term earnings and growth potential by providing geographic diversification and access to product outside of its current operating territories.