OTTAWA, Ontario – Oct 27, 2011 - MOSAID Technologies Inc. (TSX:MSD) announced today that it has entered into an arrangement agreement (the "Arrangement Agreement") with Sterling Partners pursuant to which Sterling will acquire all the outstanding common shares of MOSAID for a cash payment of $46.00 per share. The total value of the transaction is approximately $590 million.
The $46.00 per MOSAID share offered by Sterling represents a premium of 45.3% to the closing price on the Toronto Stock Exchange (the "TSX") of the MOSAID Shares on August 17, 2011, the last trading day prior to the announcement by Wi-LAN Inc. of its intention to make its unsolicited offer, and a 9.5% premium to the unsolicited take-over bid by Wi-LAN at an amended price of $42.00 per share.
Accordingly, MOSAID advises its shareholders not to tender to Wi-LAN's amended offer and to withdraw any shares that have already been tendered. Shareholders holding shares through a dealer, broker or other nominee should contact such dealer, broker or nominee to withdraw their MOSAID Shares.
For further details as to why the Board unanimously recommends that shareholders reject Wi-LAN's bid, MOSAID encourages shareholders to read the notice of change to its Directors' Circular, which will be filed in due course.
Unanimous recommendation of Sterling's Offer
The Board of Directors of MOSAID, based on the unanimous recommendation of the Special Committee and upon consultation with its financial and legal advisors, has unanimously determined that Sterling's offer is fair to MOSAID shareholders and is in the best interests of the Company. The Board of Directors of MOSAID will therefore unanimously recommend that MOSAID shareholders accept Sterling's offer.
Each of Barclays Capital Canada Inc. and GMP Securities L.P., the financial advisors to MOSAID, has provided a verbal opinion to the effect that, as of the date of such opinions and based upon and subject to the assumptions, limitations and qualifications stated in such opinions, the consideration proposed to be paid to holders of MOSAID common shares (other than Sterling and Wi-LAN and their respective affiliates) pursuant to the Sterling offer is fair from a financial point of view to such holders.
This transaction represents the culmination of the strategic alternative review process that commenced following the announcement by Wi-LAN on August 17, 2011 of its intention to offer $38.00 per common share (which was subsequently increased to $42 per share on October 19, 2011). During this process, the financial advisors and MOSAID contacted over 35 parties to discuss their interest in pursuing a strategic transaction with MOSAID. As a result of those contacts, MOSAID entered into confidentiality and standstill agreements with 12 interested parties and had ongoing discussions with multiple parties. The transaction with Sterling, in the view of the Special Committee and the Board, was the most attractive offer made for the shares of MOSAID and represents the best sale alternative available for shareholders.
Details of the Sterling Offer
The transaction will be carried out by way of a statutory Plan of Arrangement, the implementation of which will be subject to approval by at least 66 2/3% of the votes cast at a special meeting of MOSAID shareholders that is expected to be held in late December 2011 or early January 2012. The transaction is also subject to the approval of the Ontario Superior Court of Justice subsequent to the special meeting.
Pursuant to the terms of the Arrangement Agreement between Sterling and MOSAID, the transaction is also subject to applicable regulatory approvals and the satisfaction of certain closing conditions customary in transactions of this nature. The Arrangement Agreement also provides for, among other things, board support and non-solicitation covenants (subject to the fiduciary obligations of the MOSAID Board and a Sterling "right to match") as well as the payment to Sterling of a break fee equal to $22 million if the proposed transaction is not completed in certain specified circumstances. MOSAID has also agreed to suspend the payment of its quarterly dividend.
The terms and conditions of the proposed transaction will be summarized in MOSAID's management information circular, which will be mailed to MOSAID shareholders in November 2011. MOSAID anticipates that the transaction, if approved, will be completed in late December 2011 or early January 2012. A copy of the Arrangement Agreement will be available on MOSAID's website and on SEDAR at www.sedar.com.
MOSAID's financial advisors are Barclays Capital Canada Inc. and GMP Securities L.P. and its legal counsel is LaBarge Weinstein Professional Corporation. Davies Ward Phillips & Vineberg LLP is legal counsel to the Special Committee. Sterling's financial advisors are RBC Capital Markets and its legal counsel is Osler, Hoskin & Harcourt LLP.
MOSAID Technologies Inc. is one of the world's leading intellectual property companies. MOSAID licenses patented intellectual property in the areas of semiconductors and communications, and develops semiconductor memory technology. MOSAID counts many of the world's largest technology companies among its licensees. Founded in 1975, MOSAID has offices in Ottawa, Ontario, Plano, Texas and Luxembourg. For more information, please visit www.mosaid.com and the InvestorChannel.mosaid.com.
Sterling Partners is a leading private equity firm with over 25 years of experience partnering with entrepreneurs to build market-leading businesses and generate superior returns. With approximately $5 billion of assets under management, Sterling invests growth capital in industries with positive, long-term trends and provides ongoing support to management through a dedicated team of industry veterans, operators, strategy experts and human capital professionals. Sterling Partners is a leader in education, healthcare and business services and has offices in Chicago, Baltimore, and Miami. For more information, please visit www.sterlingpartners.com.
This document contains forward-looking statements to the extent they relate to MOSAID or its management, including those identified by the expressions "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "will," "would" and similar expressions. Similarly, statements in this document that describe MOSAID's business strategy, outlook, objectives, plans, intentions or goals are also forward-looking statements. These forward-looking statements are not historical facts, but rather reflect MOSAID's current expectations regarding future events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results, performance or achievements to differ materially from those in such forward-looking statements. Assumptions made in preparing forward-looking statements and financial guidance include, but are not limited to, the following: the completion of the transaction with Sterling Partners; MOSAID's continued expansion of its patent portfolio and of its opportunities for future patent licensing revenue as a result of MOSAID's acquisition of patents from third parties and from development of new inventions; manufacturers and product vendors continuing to infringe MOSAID's patents; the timing and amount of MOSAID's litigation expenses; MOSAID's ability to sign new patent licensees; current assumptions as to the identification of products that are unlicensed to MOSAID's wireless patents; and the timing and amount of MOSAID's Research & Development expenses.
Factors that could cause actual results to differ materially from expected results include, but are not limited to, MOSAID's ability to negotiate settlements with licensees; legal rulings and/or regulatory investigations or complaints having an adverse impact on the validity, enforceability, potential royalty rates, and strength or breadth of coverage of MOSAID's essential and/or nonessential patents (including, but not limited to, adverse results from litigation or proceedings in patent offices and government regulatory agencies in various countries around the world); a change in control or failure to meet a minimum royalty milestone (in each case, pursuant to the terms of the Royalty Participant Agreement) that requires MOSAID to assign the Core Wireless Patents to a third party; judicial, legislative or regulatory changes that impair the ability of patent holders to earn licensing revenues; worldwide economic conditions and demand for technology products; economic, social, and political conditions both globally and in the countries in which MOSAID or patent licensees operate, including conflict, war and, other security risks, health conditions, possible disruptions in transportation networks and fluctuations in foreign currency exchange rates; non-payment or delays in payment by, or insolvency of, licensees or other debtors; variability in patent licensees' sales of licensed products; failure to maintain and enforce MOSAID's existing patent portfolio, or failure to obtain valuable patents as a result of R&D activities, or failure to acquire valuable patents from third parties; MOSAID's ability to recruit and retain skilled personnel; change in MOSAID's financial position; consolidation of MOSAID's licensees; natural events, such as severe weather and earthquakes in the locations in which MOSAID or patent licensees operate; and changes in the tax rate applicable to MOSAID as the result of changes in the tax law in the jurisdictions in which profits are determined to be earned and taxed, the outcome of tax audits and the ability to realize deferred tax assets. Additional information concerning these and other factors can be found beginning on page 30 of MOSAID's Management's Discussion and Analysis for the fiscal year ended April 30, 2011 under the heading "Risks and Uncertainties" and also on page 10 of MOSAID's annual information form for the year ended April 30, 2011, each of which is available on SEDAR at www.sedar.com.
MOSAID disclaims any intention or obligation (except as required by applicable law) to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, or to comment on any analyses, expectations or statements of third parties concerning any forward-looking statements. Investors are cautioned not to place undue reliance on forward-looking statements. No forward-looking statement is a guarantee of future results.
For more information, please contact:
|Investor and Media Inquiries
Senior Director, Investor Relations and Corporate Communications