28 July 2008 Guildford UK

INFONIC

Infonic merges its text analytics business with Lexalytics Inc.

Infonic announces that it has signed an agreement to combine its text analytics division with Lexalytics Inc., a US company based in Amherst, Massachusetts. The text analytics divisions of both companies will be combined in a UK company (which will be called Lexalytics Limited, "the Vehicle") which will be majority owned and controlled by Infonic, Infonic owning between 70% and 75% of the issued share capital of the Vehicle (Infonic’s percentage being dependent on certain conditions) with the vendors of Lexalytics, Inc ("the Vendors") owning the balance.

Infonic and Lexalytics are providers of proprietary text analytics technologies, both companies’ solutions automatically analysing and summarising the underlining sentiment of large amounts of unstructured data. Their technologies have a variety of powerful applications, such as in the financial services sector analysing at high speed the sentiment behind multiple news stories on company stocks. Infonic’s software is being used by Thomson Reuters, Factiva and others to analyse the sentiment behind the content of data feeds.

Lexalytics’ software is used to provide text mining and text analytics functionality to clients in the public relations, marketing, eDiscovery, business intelligence and financial services sectors, its software being used with the solutions of a number of other providers, such as ScoutLabs, Cisco, Smartbrief and Burrelles Information Services LLC. Lexalytics Inc has 14 employees based in Massachusetts.

The rationale behind combining the businesses is to pool the expertise and the complementary products of the parties in this specialist area and to drive joint growth in sales, utilising Infonic’s global sales capabilities.

Infonic expects the Vehicle to make a positive contribution to Infonic’s consolidated EBITDA and cash generated from operating activities for the current financial year.

Infonic will retain 100% ownership of its existing Document Management and Geo-Replication software divisions, which will remain unaffected by the changes.

Completion of the entire transaction is expected in the next six weeks.

Commenting today, Mark Thompson, Chief Executive of Infonic said:

"We are very pleased to be announcing this merger today. The parties have been working towards this for almost six months and feel that our new company will comprise the most competent team in the text analytics field.

In Lexalytics we have found a group of people who share our passion for the power of text analytics, particularly sentiment analysis, where we feel the new entity will be the undoubted leader.

This merger represents the gradual maturity of our strategy to optimise the value within Infonic’s three core product divisions.

It is important that we give our products and intellectual property the best chance of focused sales success, and deals such as this accelerate our ability to reach target markets whilst enriching the organisation with new ideas and skills."

"This is a great deal for both parties. We have experienced increasing demand for our innovative sentiment solutions and combining our corporate and PR product focus with Infonic’s formidable financial sentiment engine allows us to cover a much broader customer base.

We were also attracted to the deal due to the fact that this gives both parties much more effective coverage of Europe and North America, as well as the added benefit of Infonic’s Asia-Pacific team based out of Singapore.

We had looked closely at several ways of growing our business which included conducting detailed negotiations with venture capital firms, however, we feel that this gives us greater scale and market-dominance in a much shorter timeframe.

We are genuinely excited about what we can achieve together."

Infonic will issue a further announcement on completion of the transaction.

For further information please visit www.infonic.com or contact:

Mark Thompson, Chief Executive Tel: +44 (0) 1483 443000

Jeff Catlin, Chief Executive, Lexalytics Inc. Tel: +1 413 253 0202

Parkgreen Communications

Paul McManus Tel: +44 (0) 20 7479 7933  

FinnCap

Geoff Nash/Rose Herbert Tel: +44 (0) 207 600 1658

NOTES TO EDITORS:

About Text Analytics:

Text Analytics is the science of using computers to decompose and understand language. 

About Infonic:

Infonic's headquarters and primary software development laboratories are in the UK with sales offices in the USA and Singapore, and sales agents in Hong Kong, Germany and Australia.

Infonic's unique software helps global organisations capture and share business information more effectively.

Infonic Geo-Replicator improves Microsoft SharePoint access for users at the edge of military, commercial and aid organisations. Infonic Document Manager improves workflows for the world’s largest logistics businesses. Infonic Sentiment Analysis helps power the world's largest trading information systems.

The company's software solutions support workers across global markets, including government, maritime, military, finance, legal, pharmaceutical and educational organisations.

Infonic's customers are supported by a team of experienced technical staff who ensure that our products are effectively integrated and supported within each client's organisation.

Infonic's Internet Intelligence division provides market leading consultancy services to blue chip companies who need to track issues or brands online.