Creates market leading TV software company

OTTAWA, July 10 /CNW Telbec/ - Espial(R) Group Inc. ("Espial" or the "Company"), (TSX: ESP), a leader in the delivery of TV middleware and applications, today announced that it has completed the acquisition of Kasenna, Inc. ("Kasenna") in exchange for an aggregate of 4,722,224 Espial common shares. As previously announced, Espial and Kasenna signed a definitive agreement on June 30, 2008. A copy of the agreement and the associated press release can be found at www.sedar.com. This acquisition positions Espial as a global market leader to operators offering video services.

"With this combination, we've created a leading TV software company that service providers worldwide can trust" said Jaison Dolvane, CEO of Espial. "Our service provider customers are looking for a partner that they can rely on to help execute on their video plans in the coming years. Together, the Kasenna and Espial team will provide an unmatched level of experience and video expertise in the industry."

Through this acquisition, Espial bolsters its portfolio with Kasenna's world-class middleware and video-on-demand (VoD) software. Kasenna solutions have been recognized as industry leading by analysts - Kasenna Mediabase was ranked the (number sign)1 IPTV video-on-demand (VoD) product by MRG in 2007.

The combined operations will provide strong synergies including,

- Increased number of Tier 1 video service provider customers, a
  footprint in over 100 customers worldwide with no overlap and a
  combined 2.4M+ IPTV licenses in deployment for one or more of our
  products.
- Broader channel relationships with equipment vendors and system
  integrators.
- Larger sales force, support and fulfillment capacity across EMEA, Asia
  & Americas.
- Broader product portfolio includes browsers, video servers, client &
  server middleware, and applications.
- Differentiated best-of-breed technology with a strong patent portfolio.
- Strong balance sheet, financial and cost synergies that will be
  accretive to Espial shareholders in 2009.
"We are pleased to close this transaction and join the Espial team" said
Vivek Pendharkar, CEO of Kasenna. "This market is beginning to move quickly
and I believe that the combined company is very well positioned to capitalize
on the expected market growth".
"We will immediately begin integrating our operations. We expect this to
be completed before the end of this year and the acquisition to be accretive
in 2009." Mr. Dolvane stated. "We will be working closely with all our
customers & partners to enhance our relationships and continue to support them
as we integrate our teams and products".
Conference Call details
Jaison Dolvane, President and Chief Executive Officer of Espial, will host
a call to discuss the acquisition on July 16, 2008 at 9:00 AM EST. The phone
number to join the discussion is:
    - Toll line - 416 644 3417
    - Toll-free line - 800 732 6179

About Espial

Espial provides IPTV middleware and applications that enable superior quality of experience, fast application performance, carrier-grade scalability, and open extensibility, all at a lower total cost of ownership. Espial's Evo(R) IPTV Service Platform includes Evo Client, Evo Server, Evo Browser, Evo BML Browser, Evo Future-Proof Framework(TM) (FPF), Evo SkinTones(TM) and applications such as Electronic Program Guide, Video on Demand, Digital Video Recorder, Content Portal, Games, and Triple Play. For more information please visit the Espial website, www.espial.com.

About Kasenna

As a market leader in IP video delivery, the company has focused on open standards and an intelligent management infrastructure which allow service providers, enterprises, and other organizations to build commercial-grade IP video networks that support new and emerging video services. Kasenna offers network operators a turnkey source of IP video infrastructure and applications for video services. Kasenna's patented software technology has been proven with thousands of successful telco, cable, and enterprise deployments worldwide. Kasenna is headquartered in Sunnyvale, California. For more information please visit the Kasenna website, www.kasenna.com.

Forward Looking Statements

This press release contains information that is forward looking information with respect to Espial within the meaning of Section 138.4(9) of the Ontario Securities Act (forward looking statements) and other applicable securities laws. In some cases, forward-looking information can be identified by the use of terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or the negative of theses terms or other similar expressions concerning matters that are not historical facts. In particular, statements about acquisition of Kasenna by Espial, including the expected benefits and synergies of the transaction, future opportunities for the combined company and products and any other statements regarding Espial's and Kasenna's future expectations, beliefs, goals or prospects are or involve forward-looking information.

Forward-looking information is based on certain factors and assumptions. While the company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward-looking information, by its nature necessarily involves risks and uncertainties, including the parties' ability to successfully integrate operations and achieve the expected benefits and synergies of the transaction and future opportunities for the combined company as currently anticipated. Additional risks and uncertainties affecting Espial can be found in Espial's Annual Report for the fiscal year ended December 31, 2007 and in its most recent quarterly report filed on SEDAR at www.sedar.com, and as may be set out in Espial's management proxy circular in respect of the proposed transaction to be made available, once filed, on SEDAR at www.sedar.com. If any of these risks or uncertainties were to materialize, or if the factors and assumptions underlying the forward-looking information were to prove incorrect, actual results could vary materially from those that are expressed or implied by the forward-looking information contained herein. Espial assumes no obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

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