Calian Technology Ltd. To Divest E-Services Business Unit

Wednesday, May 16, 2001

Calian Technology Ltd. To Divest E-Services Business Unit

Company To Focus Solely On Core Resourcing And Systems Engineering Business

Kanata, Ontario May 16, 2001  -  Calian Technology Ltd. (TSE.CTY) announced today that subsequent to a complete review of its operations and a meeting of its Board of Directors, it intends to divest itself of its e-Services business as a going concern in order to focus solely on its core Resourcing and Systems Engineering business in North America. Calian will seek to complete the divestiture of its e-Services business unit by June 30th, 2001.

Larry O'Brien, President & CEO stated, "Companies such as Calian have historically generated significant double digit returns on capital employed. As Calian grew and was examining ways to expand its service offerings, it made the decision to complement its traditional services business with related e-Business activities such as e-Learning, Content Management and Management Consulting. It became evident, as Calian entered into these business areas, that the required capital investments and research activities far exceed the normal investments made in the resourcing business.

"Given the significant investments required to sustain the e-Services activities, the decision has been made that in order for us to enhance shareholder value, it was in the best interest of the Company to focus solely on our Resourcing and Systems Engineering business activities. These provide stable, predictable returns from long-term contracts with blue-chip customers and require little investment while generating significant return on capital employed. In contrast, e-Services activities require significant equity capital, a tolerance for volatility and a willingness to absorb both positive and negative financial performance. Calian needs predictable cash flows in order to maintain its balance sheet and to continue to grow our working capital as expected by our shareholders."

O'Brien continued, "As we go forward, Calian is committed to ensuring the greatest possible return to its shareholders. We believe that returning the Company to doing what it does best makes sense for the long-term viability of Calian. By focussing our efforts on these activities, Calian will be able to maintain its world-class reputation as a leading provider of Resourcing and Systems Engineering services."

There are approximately 70 Calian employees directly associated with the e-Services business to be divested. "We recognize that our employees bring the most value to the e-Services business, so we will negotiate with prospective buyers to maximize opportunities for these employees," said Mr. O'Brien. "We will work with all affected employees to ease their transition through the process."

Today 9 employees received their notice. The balance of the e-Services employees will be associated with the divestiture of the e-Services business. Calian currently employs approximately 2,500 individuals in Canada and the United States.

About Calian

Calian Technology Ltd. (TSE:CTY) sells technical and professional services to industry and government. In the 2000 fiscal year Calian had sales in excess of $125 Million.

For further information, please contact:


Larry O'Brien
Chairman, President & CEO
Telephone: (613) 599-8600


Greg Strong
President & CEO
Right Turn Communications
Telephone: (613) 850-1900




Certain information included in press releases on this site is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Such statements are generally accompanied by words such as "intend", "anticipate", "believe", "estimate", "expect" or similar statements. Factors which could cause results or events to differ from current expectations include, among other things: the impact of price competition; scarce number of qualified professionals; the impact of rapid technological and market change; loss of business or credit risk with major customers; technical risks on firm fixed price projects; general industry and market conditions and growth rates; international growth and global economic conditions, and including currency exchange rate fluctuations; and the impact of consolidations in the business services industry. For additional information with respect to certain of these and other factors, please see the Company's most recent annual report and other reports filed by Calian with the Ontario Securities Commission. Calian disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. No assurance can be given that actual results, performance or achievement expressed in, or implied by, forward-looking statements within this disclosure will occur, or if they do, that any benefits may be derived from them.

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