NeoNet announces proposal to acquire Lexit to Create Leading Global Execution Services

The international equities agency broker NeoNet AB (publ) has signed a Letter of Intent with Lexit Financial Group, Inc., USA, and shareholder representatives, to acquire the Lexit Group. The merged operations will create a leading agency brokerage in the field of global execution services for institutional investors and broker-dealers, with electronic direct market access to over 80 percent of the market capitalization on the world’s stock exchanges. For the fiscal year 2002, NeoNet and Lexit posted total combined revenues at more than SEK 250 million (USD 33 million). Together, NeoNet and Lexit have about 175 institutional clients in 13 countries.

Lexit is a privately held, independent agency broker with offices in the US and the UK and has a strong position in offering institutional investors and broker-dealers US direct market access and trade execution. Clients are offered electronic trading services through multiple liquidity pools on NASDAQ and NYSE, Amex and for US derivatives. Lexit has also recently added trading in European stocks.

NeoNet has offices in the US, the UK, Germany and Sweden and offers its institutional clients execution services on leading European stock exchanges and NASDAQ through a single point of electronic direct market access. Trading services are also available through NeoNet’s international trading desk. NeoNet currently offers membership-based electronic access to the European stock exchanges of London, Frankfurt, Paris, Amsterdam, Brussels, Milan, Stockholm, Helsinki, Copenhagen and Oslo and plans to add on access to Swiss Virt-x and the Madrid Stock Exchange this year.

For the fiscal year 2002, Lexit Financial Group, Inc. recorded revenues of USD 8.6 million, up from 5.2 million the previous year, and a Net Loss of USD 0.1 million. For the first quarter of 2003, Lexit revenues were USD 2.0 million with a Net Loss of USD 0.1 million. NeoNet estimates that after goodwill amortizations and financial net, the acquisition will make a profit contribution to NeoNet.

The purchase price will consist of cash and newly issued shares in NeoNet. The final acquisition is conditioned upon completed satisfactory due diligence, the shareholders of NeoNet authorizing the new issue of shares at an extraordinary shareholders' meeting, planned for 15 July, acceptance from NASD (USA) and FSA (UK) regarding change of ownership of Lexit Capital, LLC in the USA and Lexit Capital UK Limited in the UK and other customary matters.

"The board of NeoNet is very pleased to announce this proposed acquisition which will create an even stronger global and independent securities execution-focused player. We are convinced this will benefit the shareholders and clients of both NeoNet and Lexit," said Staffan Persson, Chairman of NeoNet.

"The combination of NeoNet and Lexit where two of the industry’s innovators join forces is a logical step for Lexit’s shareholders, employees and clients," said Johan Carlsson, Chairman of Lexit Financial Group, Inc.

"NeoNet has a reputation for providing reliable robust execution to the European markets. Lexit’s reputation is quality, low-cost US execution and an abundance of client services. By combining our strengths we are significantly enhancing our competitive position," said Peter Kearns, CEO of Lexit.

"We intend to create a very strong player in global securities execution since both companies share the dedication for independent and unbiased agency-based brokerage and execution services exclusively targeting the institutional investors and broker-dealers of the world. With the addition of Lexit’s US order-routing capabilities we will have the ability to offer our clients in 13 countries electronic direct market access to over eighty percent of the market capitalization on the world’s stock exchanges," said Torvald Bohlin, CEO of NeoNet.

Lexit co-founders Peter Kearns and Johan Carlsson will take on positions with NeoNet on the Group’s Executive Management Team when the transaction is completed.

Hjalmarsson & Gunterberg Corporate Finance is acting as financial advisor to NeoNet in connection with the transaction.

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