- ESW agrees to sell all of its subordinate voting shares
in Optiva
- Optiva and ESW agree to enter into separation agreement,
intellectual property agreement and mutual multi-party
release
- Optiva intends to complete subsequent offering of
subordinate voting shares and receives non-binding indications of
interest for up to $17
million
TORONTO, March 1, 2021 /CNW/ - Optiva Inc.
("Optiva" or the "Company") (TSX: OPT), the leader in
providing communications service providers (CSPs) worldwide with
cloud-native revenue management software, announces today that ESW
Capital, LLC ("ESW") has agreed to sell all of its
subordinate voting shares of Optiva (the "Shares") in a
private sale to OceanLink Management Ltd., EdgePoint Investment
Group Inc., Maple Rock Capital Partners and Meson Capital at
$39.90 per Share. Optiva itself will
not participate in such sale. ESW has also agreed to terminate all
of its related party agreements with Optiva and to waive certain
provisions of the warrants to acquire Shares (the
"Warrants") held directly or indirectly by ESW (the
"Separation Agreement").
Optiva also announces today its intention to complete a
subsequent private placement offering of its Shares and its receipt
of non-binding indications of interest to participate of up to
$17 million. The Company intends to
provide other eligible investors the opportunity to participate in
the offering on the same terms. The definitive terms of any
offering will be provided by the Company in a subsequent press
release. Any subsequent offering would be subject to receipt of
Toronto Stock Exchange approval and other regulatory approvals.
"This separation marks the beginning of a new chapter for Optiva
and its stakeholders," said Lee
Matheson, Vice-Chair of Optiva. "Management and the board
will now be able to dedicate their full attention and energy to
accelerating Optiva's strategic plan. We look forward to this next
phase in the Company's growth."
"This sale by ESW of its Optiva shares creates substantial
benefits to Optiva by clearing the way for a financing that will
allow Optiva to invest in its product roadmap," said Mr. Matheson.
"The separation also enhances the protection of Optiva's
intellectual property, will significantly reduce expenditures on
legal and professional fees relating to shareholder disputes going
forward and will meaningfully lower risk of dilution to existing
shareholders through the shortening of the term of the outstanding
warrants held by ESW from approximately six years to two years and
removing related dilution provisions."
Key Highlights
ESW Share Sale
OceanLink Management Ltd., EdgePoint Investment Group Inc.,
Maple Rock Capital Partners and Meson Capital will purchase
1,476,851 Shares from ESW (being all of the Shares held by ESW) at
a purchase price of $39.90 per Share
for aggregate proceeds to ESW of approximately $58,926,355 (the "ESW Share Sale").
The Shares acquired in connection with the ESW Share Sale will
be subject to a statutory hold period in Canada of four months and one day from the
closing date in accordance with applicable securities laws.
The ESW Share Sale is expected to close, subject to satisfaction
of all closing conditions, on or prior to March 5, 2021.
Separation Agreement
Optiva and ESW will enter into the Separation Agreement,
pursuant to which, among other things:
(i) ESW and Optiva will agree
to certain non-solicitation provisions relating to their respective
employees, and ESW will agree to certain non-competition provisions
in respect of customers of Optiva;
(ii) the terms of the Warrants
held directly or indirectly by ESW will be amended to remove
certain anti-dilution provisions, provide Optiva with a right to
repurchase Warrants for cancellation and abridge the expiry date to
two years from the closing date of the ESW Share Sale. ESW will
also provide a proxy and power of attorney to Optiva to vote all
Shares issued upon exercise of the Warrants1; and
(iii) Optiva and ESW will
agree to terminate all rights, entitlements, and obligations under
previous contractual arrangements between them (other than the
Warrants), including, among others, the subscription agreement
between Optiva and ESW, which granted ESW director nomination
rights in certain circumstances, and the services agreements
between Optiva and ESW's affiliates, DevFactory FZ-LLC and
Crossover Markets, Inc.
Resignations and Multi-Party Release
Conditional on the closing of the Separation Agreement, each of
Andrew Price and Neeraj Gupta, ESW's board nominees, have agreed
to resign from the board of directors of Optiva.
In addition, Optiva, ESW and certain of its affiliates, and
certain shareholders of Optiva have agreed to enter into a mutual
multi-party release (the "Mutual Release") pursuant to which
the parties will release each other from certain claims relating to
the Company and one another.
Intellectual Property Agreement
ESW and Optiva will enter into an agreement granting
intellectual property rights to Optiva with respect to registered
intellectual property and will each covenant not to make certain
claims with respect to unregistered intellectual property (the
"IP Agreement").
TSX Approvals
The Toronto Stock Exchange (the "TSX") has waived the
requirement in Section 608 of the TSX Company Manual to obtain
shareholder approval for the waiver and amendment of the Warrants
because the amendments are being made as part of the Separation
Agreement. The amendments include terminating the provision in the
Warrants that adjusts the exercise price of the Warrants downward
following certain share issuances by Optiva at a price below the
strike price of the Warrants; decreasing the term of the Warrants
from approximately 6 years remaining to two years; and providing
Optiva with the right to settle the Warrants for the in-the-money
cash value of the Shares otherwise issuable to ESW upon
exercise.
Pursuant to the TSX Company Manual, the amendments to the
Warrants will be effective as of the date that is 10 business days
from the date hereof.
Early Warning Requirements – EdgePoint
EdgePoint Investment Group Inc. ("EdgePoint") currently
exercises control or direction over 1,047,685 Shares, representing
approximately 19.7% of the issued and outstanding Shares. Pursuant
to the ESW Share Sale, EdgePoint will acquire 526,290 Shares in its
capacity as portfolio manager for an account that it manages.
Following completion of the ESW Share Sale, EdgePoint will exercise
control or direction over an aggregate of 1,573,975 Shares,
representing approximately 29.6% of the issued and outstanding
Shares. The total consideration payable by EdgePoint to ESW
pursuant to ESW Share Sale is $20,998,971 in cash.
The acquisition of the Shares pursuant to the ESW Share Sale 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 relies on the private agreement exemption set forth in
section 4.2 of National Instrument 62-104 - Take-Over Bids and
Issuer Bids ("NI 62-104"). The purchase of the Shares by
EdgePoint pursuant to the ESW Share Sale is being made from one
person (i.e. ESW). The offer is not being made generally to holders
of Shares. The value of the consideration to be paid by EdgePoint
for the Shares, including brokerage fees or commissions, is not
greater than 115% of the market price of the Shares at the date of
the bid as determined in accordance with section 1.11 of NI
62-104.
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 – OceanLink
OceanLink Management Ltd. ("OceanLink") does not
currently have beneficial ownership of, or control or direction
over, any securities of the Company. Immediately following
completion of the ESW Share Sale, OceanLink will have ownership of,
or control or direction over, 781,250 Shares, representing 14.7% of
the issued and outstanding Shares. The acquisition of the Shares
pursuant to the ESW Share Sale is being made in the ordinary course
of business and for investment purposes. OceanLink may from time to
time in the future 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.
OceanLink 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 Lan Zhang, Chief Financial Officer of OceanLink,
at 437-249-0202. OceanLink's address is 2 Bloor Street West, Suite
1702, Toronto, Ontario, M4W
3E2.
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. Optiva's
head office is located at 2233 Argentia Road, East Tower, Suite
302, Mississauga, Ontario, L5N
2X7.
Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements and
forward looking information within the meaning of applicable
securities laws including, without limitation, statements regarding
the intention to complete a subsequent offering, the receipt of
indications of interest to participate in any subsequent offering,
the intention to provide other eligible investors the opportunity
to participate in any subsequent offering on the same terms, the
receipt of approvals for any subsequent offering, the anticipated
benefits to the Company of the ESW Share Sale, the anticipated
timing of and completion of the ESW Share Sale, the entering into
of purchase agreements in connection with the ESW Share Sale,
Separation Agreement, IP Agreement and Mutual Release and
anticipated board resignations. 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 include: the ability of the parties to satisfy the
closing conditions to the ESW Share Sale in the expected time or at
all, some of which are beyond the control of the parties; the
ability of the Company to complete a subsequent offering on the
terms described herein or at all; and other risks regarding the
Company's business discussed in the Company's most recent annual
information form, which is available on SEDAR at www.sedar.com and
on Optiva's website at www.optiva.com/investors/. 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.
_____________________________________________________________
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1 The
Company has provided the TSX with an undertaking not to exercise
its right to vote any Shares issued upon exercise of the
Warrants.
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SOURCE Optiva Inc.