Retalix agrees to merge with TCI Solutions

Retalix Ltd has entered into a merger agreement to acquire TCI Solutions Inc (TCI), a provider of strategic pricing, merchandising, and inventory management systems for the grocery industry.

Irvine CA-based TCI enables grocers to automate pricing strategies, streamline inventory management, and execute consistently from headquarters to store. TCI's flagship offering, TCI Retail, consists of headquarters (TCI HQ) and store-level (TCI Store) applications that provide supermarket operators with the control, automation, and execution capabilities necessary to increase revenue, lower costs, and improve margins.

Total amount of the transaction is $34.35 million. Concurrent with this merger agreement, Retalix acquired through a separate purchase agreement 97% of the preferred stock of TCI, representing 73% of the outstanding capital stock of TCI on an as converted basis, for a purchase price of $30.05 million. This amount consists of $12.8 million in cash and $17.25 million in shares of Retalix stock. As a result, Retalix will be required to pay only the additional $4.3 million in cash to complete the transaction.

The merger is subject to TCI shareholder approval, as well as other closing conditions. If conditions are met, Retalix expects that the transaction will close in the second quarter of 2005.

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