TORONTO, July 20, 2020 /CNW/ - Optiva Inc.
("Optiva" or the "Company") (TSX: OPT) announces
today that it has fully redeemed all of the Series A Preferred
Shares of the Company (the "Preferred Shares"), including
all accrued and unpaid dividends thereon, beneficially owned or
controlled by ESW Capital, LLC and its affiliates, in accordance
with the terms of the Preferred Shares. The aggregate redemption
price in respect of the Preferred Shares was US$91,378,719 (the "Redemption
Amount").
The Company also announces that it has closed its previously
announced US$90 million financing
(the "Debenture Financing") of 9.75% secured PIK toggle
debentures due 2025 (the "Debentures"). The Debentures are
guaranteed by certain of the Company's subsidiaries, and constitute
senior secured obligations of the Company. The net proceeds from
the Debenture Financing were used to finance the Redemption Amount.
The Debenture Financing was completed on a private placement basis
pursuant to certain prospectus exemptions, and consisted of a
non-brokered private placement and a marketed brokered private
placement led by CIBC Capital Markets ("CIBC") as agent for
the Debenture Financing. In addition, based on the reconstitution
of the board described below, which significantly enhances the
independence and governance of Optiva, Maple Rock Capital Partners
("Maple Rock") has withdrawn its meeting requisition.
EdgePoint Investment Group Inc. (collectively,
"EdgePoint") is investing in Optiva's debentures to support
the company's growth plans. "As holders of both Optiva's equity and
debt, we are very excited about the next chapter of Optiva's
growth", said Lee Matheson, Partner
at EdgePoint Investment Group. "We believe that Optiva is uniquely
positioned in the market as one of the few players with a
commercially viable cloud native product. The cloud transition has
happened in virtually every software category, and we believe the
OSS/BSS markets are the next to be disrupted."
"We have strong conviction that Optiva will extend its position
as a leading independent vendor in the OSS/BSS industry, driven by
its early investment into the cloud-native product suite. Not only
are the cost savings for Optiva's clients significant, but the
added level of speed and security further exemplify its superiority
compared to traditional on-premises solutions," said Matt Kirk, Investment Partner at Maple Rock,
another investor in Optiva's debentures.
Addition of New Independent Directors
The Company will undertake a reconstitution of its Board that
will result in eight nominees proposed for election as directors at
the Company's next annual meeting of shareholders (the
"Meeting") to be held on August 18,
2020.
Concurrent with the closing of the Debenture Financing and in
connection with the withdrawal by Maple Rock of its previously
announced requisition for a special meeting of shareholders of the
Company, Farhan Thawar, Christy
Jones and Chris Helling have
resigned from the Company's board of directors, and Andrew Day, Lee
Matheson and Paul Yancich
have been appointed as directors of the Company.
Furthermore, the Company also announced that it will nominate
for election at the Meeting three additional independent directors,
Anuroop Duggal, Dan Goldsmith, and Ryan
Morris. Mr. Duggal, Mr. Goldsmith, and Mr. Morris each have
strong backgrounds in technology, software and finance, as well as
a broad range of public company executive and capital markets
experience. Rob Stabile and
Demetrios Anaipakos will also be
nominated for re-election at the Meeting.
"The redemption of the Preferred Shares and concurrent close of
the Debenture Financing are a testament of our commitment to engage
with our shareholders to the betterment of the Company and all
stakeholders," says Rob Stabile,
Lead Director. "The new independent directors and director nominees
are all highly qualified with impressive experiences and track
records that will enhance our Board and contribute to Optiva's
growth strategy. We would also like to thank Farhan, Christy, and
Chris for their contributions over the past three years."
Update on CEO Search Process
As previously announced, the Company's Board of Directors has
engaged an executive search firm to conduct a search for a new
Chief Executive Officer. The Company will leverage the collective
experience of Mr. Day, Mr. Matheson, and Mr. Yancich in leading and
building successful companies to assist in the recruitment of
Optiva's new Chief Executive Officer. As such, all three
individuals will join Demetrios
Anaipakos to recruit a talented external candidate with a
track record of value creation to become the next Chief Executive
Officer of the Company.
New Director Biographies – Effective Immediately
Andrew Day
Andrew Day has held several senior leadership
positions in sales and general management for technology companies
and most recently was the Chief Operating Officer & EVP of
Internap Corporation. He has over 25 years of management experience
in telecommunications, technology innovation, sales, and marketing
leadership. He has served as Senior Vice President, Consumer
Channels at Rogers Communications, where he led all consumer
product sales across all sales channels. He has also served as CEO
of Primus Telecommunications Group Inc. and Primus Canada, where he was responsible for the
company's direction and results. Before joining Primus, he held
various roles of increasing responsibility in general management,
sales, product management, and finance at AT&T, Gillette, and
Xerox. Andrew holds an Honours B. Comm. from McMaster University, is a Chartered Public
Accountant (CPA) and is also a Chartered Director (C. Dir.).
Lee
Matheson
Lee Matheson
is a partner at Edgepoint Investment Group. Previously Lee was a
co-founder of Broadview Capital Management and portfolio manager of
the Broadview Dark Horse LP, a long/short fund focused on Canadian
small cap securities. Lee has extensive public company experience
having served on the boards of RDM Corporation, AlarmForce
Industries Inc., WesternOne Inc., Medworxx Solutions Inc., and
Strad Inc. Lee is currently a director of Echelon Financial
Holdings Inc., exactEarth Ltd., and Old PSG Wind-Down Ltd.
Additionally, Lee serves as co-chair of Canadian Art Foundation.
Paul
Yancich
Paul Yancich
brings to the Optiva board deep investing and operating expertise
in the software industry. Prior to his current role on the
investment team at TorQuest Partners, a leading middle-market
private equity firm based in Toronto, he worked at Constellation Software
("CSI"), a publicly traded investment & operating company. At
CSI, Paul worked for the Founder/CEO, oversaw capital deployment
globally for one of CSI's six operating groups, and led a sizeable
portfolio of businesses. Previously, Paul worked for Arsenal
Growth, a growth-stage private equity firm focused on enterprise
software, amongst other sectors. Paul graduated with a BA from
Princeton University.
New Director Biographies – To be Nominated at the
Meeting
Anuroop
Duggal
Anuroop Duggal
was a partner at 3G Capital, a global multi-billion dollar asset
manager, where he helped launch, manage, and grow a public markets
focused equity and credit fund. Prior to that, he was an investor
with Goldman Sachs Investment Partners, which was the Asset
Management division's flagship hedge fund. Anuroop is also an
Adjunct Professor for the MBA program at Columbia Business School, where he teaches value
investing courses with key topics including capital allocation,
business model analysis, valuation, and management analysis. He
graduated from the University of Western
Ontario with an Honors Business Administration degree
(Richard Ivey School of Business,
gold medalist) and an Electrical Engineering degree.
Dan
Goldsmith
Dan
Goldsmith is an accomplished executive with a strong track
record of building businesses from startup to scale. With more than
20 years of experience in software and management consulting, Dan
has developed deep expertise in SaaS, market growth strategies,
global expansion, and verticalization with a focus on Life Sciences
and Education industries. Dan most recently served as the CEO of
Instructure, leading the company to a successful $2B exit from public to private and increasing
shareholder value by 50% over a two year period. During his tenure,
Instructure delivered strong sales growth and over $200M in ARR, released new products, executed two
acquisitions, and reached cash flow positive for the first time in
the company's history. Prior to Instructure, Dan was a c-level
executive at Veeva Systems. During his 8+ years at Veeva, he most
recently served as the Chief Strategy Officer developing Veeva's
multi-year growth plan and launching products. While at Veeva, the
company grew to over 700M in ARR,
went through a successful IPO, and achieved a $25B market cap with sustained 20%+ annual growth
and profitability. Before Veeva, Dan had a full career in
management consulting working for Accenture,
PriceWaterhouseCoopers, and IBM.
Ryan
Morris
Ryan Morris is
an entrepreneur and investor and has served as Executive Chairman
of Software Motor Company (SMC) since October 2017. Ryan
founded Meson Capital Partners LLC, an investment firm in Feb
2009. Ryan has served as Chairman of 3 publicly traded
companies including most recently Sevcon, Inc. which was a world
leader in power electronics for high performance electric
vehicles. Sevcon was sold to BorgWarner in September 2017. In July
2008, after finishing his B.S. and M.Eng. from Cornell University in Operations Research &
Information Engineering, Ryan was Co-Founder and CEO of VideoNote
LLC, a software company dedicated to capturing and indexing the
videos of college lectures.
Securities Law Matters
The Debentures have not been and will not be registered under
the U.S. Securities Act of 1933, as amended (the "U.S.
Securities Act"), or any state securities laws, and are being
offered and sold in the United
States only to qualified institutional buyers in reliance on
Rule 144A under the U.S. Securities Act. EdgePoint and Maple Rock
participated in the Debenture Financing. The Debentures are subject
to a statutory four-month hold following the date of issuance under
National Instrument 45-102 – Resale Restrictions. EdgePoint
and Maple Rock are insiders of the Company, each of whom
beneficially own or control more than 10% of the Company's issued
and outstanding subordinate voting shares. The participation by
each insider in the Debenture Financing is subject to Part 5 of
Multilateral Instrument 61-101 – Protection of Minority Security
Holders in Special Transactions ("MI 61-101"). The
Company is exempt from the formal valuation requirement in section
5.4 of MI 61-101 in reliance on section 5.5(c) of MI 61-101 and is
exempt from the minority shareholder approval requirement in
section 5.6 of MI 61-101 in reliance on section 5.7(1)(f) of MI
61-101. The Debenture Financing was also subject to Part V of the
Toronto Stock Exchange (the "TSX") Company Manual.
Pursuant to the terms of the indenture governing the Debentures,
for so long as the Company is subject to the requirements of the
TSX Company Manual, the total amount of cash interest paid to
EdgePoint and Maple Rock and their respective affiliates and
associates in respect of Debentures held by them cannot exceed
$14,880,000 in aggregate, unless the Company first obtains the
approval of the TSX or the approval of the holders of the Company's
subordinate voting shares in accordance with the TSX Company
Manual.
Early Warning Requirements – EdgePoint
EdgePoint currently exercises control over 963,654 subordinate
voting shares of the Company, representing approximately 18.1% of
the Company's issued and outstanding subordinate voting shares. The
acquisition of the Debentures is being made in the ordinary course
of business and for investment purposes. EdgePoint may acquire or
dispose of additional securities of the Company or may enter into
derivative or other transactions with respect to such securities on
behalf of accounts it manages.
EdgePoint will prepare and file a report containing the
information required by Form 62-103F1 Required Disclosure under the
Early Warning Requirements in connection with the matters referred
to in this press release. Once filed, a copy of this report can be
obtained by contacting Sayuri
Childs, EdgePoint's Chief Compliance Officer, at (416)
963-9353. EdgePoint's head office is located at 150 Bloor Street
West, Suite 500, Toronto, Ontario
M5S 2X9.
Early Warning Requirements – Maple Rock
Maple Rock currently exercises control over 1,188,091
subordinate voting shares of the Company, representing
approximately 22.4% of the Company's issued and outstanding
subordinate voting shares. The acquisition of the Debentures is
being made in the ordinary course of business and for investment
purposes. Maple Rock may acquire or dispose of additional
securities of the Company or may enter into derivative or other
transactions with respect to such securities on behalf of accounts
it manages.
Maple Rock will prepare and file a report containing the
information required by Form 62-103F1 Required Disclosure under the
Early Warning Requirements in connection with the matters referred
to in this press release. Once filed, a copy of this report can be
obtained by contacting Stephen Lane,
Maple Rock's Chief Financial Officer, at (416) 572-3899. Maple
Rock's head office is located at 21 St. Clair Ave. E, Suite 1100,
Toronto, Ontario M4T 1L9.
About Optiva Inc.
Optiva Inc. is a global leader in providing CSPs with
cloud-native revenue management software on the public cloud. CSP
operators and mobile virtual network operators can integrate our
best-of-breed charging engine into a BSS stack or deploy our fully
managed, end-to-end, SaaS-based suite. Optiva solutions offer
unmatched speed, scale, security and savings. Our market knowledge,
analytical insights and unique Customer Success Program ensure
telecoms are equipped to achieve their strategic business goals.
Established in 1999, Optiva Inc. is on the Toronto Stock Exchange
(TSX: OPT). For more information, visit www.optiva.com.
Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements and
forward looking information within the meaning of applicable
securities laws. Often, but not always, forward-looking statements
can be identified by the use of words such as "plans", "expects",
or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", or "believes", or describes a "goal", or variation of
such words and phrases or state that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur
or be achieved. There is no assurance that any forward-looking
statements will materialize. Risks that could cause our results to
differ materially from our current expectations are discussed in
the Company's annual information form dated March 9, 2020 and management's discussion and
analysis in respect of the three months ended March 31, 2020. The Company disclaims any
intention or obligation to update any forward-looking statements,
except as required by law, even if new information becomes
available, as a result of future events or for any other
reason.
SOURCE Optiva