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IBSG International Sells Nigerian CAC Contract to South Africa's Galaxy Five (PTY); IBSG to Receive $4 Million Over 4 Years Plus $15 Million in Additional Revenues from South African Project Over Next 12 Months 3/8/2006
CELEBRATION, Fla., Mar 08, 2006 (BUSINESS WIRE) -- IBSG International, Inc. (OTCBB:IGII), a holding company for three software subsidiaries, announced today that it has executed a memorandum of understanding to sell the asset known as the CAC contract in Nigeria to South Africa-based Galaxy Five (pty), Ltd., a business consultant firm designed to improve vendor capabilities and produce vendor opportunities for the SME market with multi-national firms in specific vertical industries beginning with the mining industry of South Africa. This represents, in our management's opinion, the largest vertical industry in South Africa and to our knowledge, Galaxy Five has signed up all 27 major mines to their program.
Under the terms of the prospective asset purchase agreement, Galaxy Five will receive the CAC contract for a fee of $1 million for four years to be paid annually and ensures that $15 million in additional revenues above all license revenues will be generated from the South African project that it operates in partnership with IBSG International (IBSGI). IBSGI will continue to maintain the license, provide system support and assistance to Galaxy Five for collection of outstanding receivables. Although a final acquisition agreement is expected to be executed, there is no guarantee.
Galaxy Five is one of IBSGI's partners on the South African project of which IBSGI announced recently the project had been expanded to a national program and that BAE Systems, under its off set program, agreed to fund in partnership with the DTI and the IDC of the South African government. Galaxy Five will provide its vendor improvement program in conjunction with IBSGI's BizWorldPro, A-Division (the recently announced acquisition of IBSGI) and Global Eagle, the black empowerment firm in South Africa.
Dr. Michael Rivers, CEO of IBSG International said, "We are very pleased to have made this sale because it is a win-win arrangement with a partner firm. This simplifies our receivables situation with regard to the Nigerian business. Galaxy Five, as a firm based in South Africa, will get business in the continent's other major economy where its local knowledge is particularly well suited. Moreover, it deepens our relationship in our mutual South African business, which both companies see as important to their future success."
Mr. Jan Heyneke, Managing Director of Galaxy Five as well as several other South African companies stated, "Quality growth for our projects begins with having a presence in the respective nations of Africa. Acquiring this business positions us to conduct business in a country, already rich with oil and is quickly becoming one of the major commerce centers in the African region."
About IBSG International, Inc.
IBSG International, Inc. is a holding company for three software subsidiaries: Intelligent Business Systems Group, Inc. (IBSG), a provider of turn-key digital service center software; Secure Blue, Inc., a Sarbanes-Oxley and security software solution provider, and Intelligent Business Systems Development (IBSD), a software development, maintenance and data storage company.
IBSG offers enterprise solutions designed to enhance the operating efficiency and create revenue for State Small Business Development Centers, business associations (e.g., Chambers of Commerce) and Fortune 1000 corporations by licensing its unique turnkey digital service center software, which provides a broad range of digital budgetary, administrative and commercial services (B2B, e-commerce, government to business and enterprise business services) on a single platform known as the BizWorldPro(C).
Secure Blue, Inc. provides a robust economical Sarbanes-Oxley (SOX) compliance and security software suite, Secure Blue SOX Pro. It is targeted at small and mid cap public companies as well as private companies requiring SOX compliance to enable them to continue working with public companies.
As software providers, system integrators and Application Service Providers, IBSG, Inc. and Secure Blue, Inc. generate revenue from license sales, system modifications, systems support and a percentage of monthly customer fees. The typical IBSG/Secure Blue license agreement has a five-year term which is updated on an annual basis and almost invariably renewed upon expiration; to date the company has had only one licensee not renew, due to the expiration of the licensee's contract with another party.
IBSD, Inc. will provide ongoing support of International's other subsidiaries, IBS Group and Secure Blue. The company provides development, system support and secure data storage, and will maintain offices in the US, India and possibly Romania, where its current offshore development teams are located.
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