MAI Systems Corporation is entereing into an agreement to be acquired by SoftBrands. MAI operates principally through its Hotel Information Systems (HIS) subsidiary. HIS is the maker of the epitome hotel property management systems and core central reservations system. SoftBrands indicated that it will merge the HIS personnel, products and services into its hospitality operations.

At the closing of the acquisition, SoftBrands will make a closing payment aggregating $13 million, or $32.32 per share, to the holders of MAI common stock, and will pay $2.5 million, or $6.22 per share, into an escrow account where it will be retained until December 31, 2007 (subject to extension of such period, pending the resolution of claims by SoftBrands against the escrow). Furthermore, SoftBrands will pay approximately $6.2 million to repay MAI indebtedness. Additionally, certain consideration shall also be paid to the officers of the company.

The acquisition has been approved by the MAI board of directors and the holders of a majority of MAI’s common stock, but has not yet closed. The transaction, which is expected to close in the next two weeks, is subject to customary closing conditions.

MAI expects to mail a notice to stockholders promptly following the closing of the merger, which will describe in greater detail the merger transaction, the consideration to be received by stockholders, and the dissenter’s rights applicable to the merger transaction. Such mailing is expected to include a letter of transmittal to be used by MAI stockholders to submit their share certificates and receive their closing payments. MAI stockholders are cautioned that the amount to be received out of escrow depends upon the result of certain losses incurred or suffered by SoftBrands and related parties. The amount that will actually be distributed from escrow is not capable of being predicted at this time.

Prior to a reverse stock split in November 2005, MAI had been a reporting company under the Securities Exchange Act of 1934, but no longer is subject to such reporting requirement. MAI stockholders are encouraged to review carefully the notice which will be mailed to them shortly.

MAI Chief Executive Officer W. Brian Kretzmer commented, “Our Company has performed better over the last several years, we re-established the Hotel information Systems brand and introduced cutting edge technology to our industry. The Hotel Information Systems organization will blend well with the SoftBrands Hospitality business and a larger stronger entity will emerge. The hospitality industry should benefit from this transaction by having a strong global provider. I am proud of the people and the products of Hotel Information Systems and am confident in the success of the combined entity.”
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