LAVAL, QC, July 30, 2012 /CNW Telbec/ - 20-20 Technologies Inc. ("20-20 Technologies" or the "Corporation") (TSX: TWT) announced today that it has entered into a definitive
arrangement agreement (the "Agreement") to be acquired by an affiliate controlled by Vector Capital
Corporation ("Vector"), a leading global private equity firm specializing in the technology
Under the terms of the Agreement, Vector has agreed to acquire all of
the issued and outstanding shares of the Corporation for consideration
of $4.00 in cash per share, representing total equity value, on a fully
diluted basis, of approximately $77 million. The $4.00 per share consideration represents a 28% premium over the
closing share price of $3.12 on April 3, 2012, the last trading day
before the strategic review process was publicly announced, and a 33%
premium over the average closing share price for the 90 days prior to
April 3, 2012.
The Agreement represents the culmination of the strategic review process
initiated by the Corporation's Board of Directors in order to review
strategic and financial alternatives to enhance shareholder value. The
strategic review process was supervised by the Special Committee of the
Board of Directors of the Corporation composed of four independent
directors, namely Jocelyn Proteau as Chairman, Jacques Malo, Philip
Deck and Benoît La Salle. Speaking on behalf of the Special Committee,
Chairman Jocelyn Proteau said: "Through a broad and thorough process,
the Corporation contacted in excess of 50 potential financial and
strategic purchasers from across Canada, the United States and Europe.
The transaction with Vector is the culmination of this extensive public
process and provides compelling value to our shareholders. On behalf of
the Board, I would like to take this opportunity to thank the current
shareholders for their support throughout the years."
Jean-François Grou, Chief Executive Officer of 20-20 Technologies, said:
"Much has been done in the last 25 years to build 20-20 Technologies
into what is now the world's leading provider of computer-aided design,
business and manufacturing software tailored for the interior design
and furniture industries. We are pleased to be partnering with Vector
to leverage their global capabilities, industry knowledge, and
financial resources to further our shared long-term vision for the
Corporation and benefit our customers."
Aalok Jain, a Vice President with Vector, said: "20-20 Technologies is a
well-managed company with superior products, a strong development plan
and a solid reputation for client service. We look forward to
partnering with the Corporation's management and employees to continue
its strategy and solidify its place as global leader in the industry."
Amish Mehta, a Partner at Vector, continued: "20-20 Technologies has all
the characteristics we consider when making an investment and
exemplifies Vector's strategy of partnering with management to
transform leading technology companies. Using 20-20 as a platform
investment, we intend to continue investing in innovative solutions for
interior design and furniture customers and expand 20-20's presence in
new markets organically and through acquisitions while maintaining a
strong presence in Québec where the technology was developed."
UNANIMOUS BOARD APPROVAL
The transaction has been unanimously approved by the Board of Directors
of 20-20 Technologies (with Jean Mignault, as an interested director,
abstaining) after having received the unanimous recommendation of the
Special Committee and with the benefit of advice from its legal and
financial advisors. In doing so, the Board of Directors determined that
the transaction is in the best interests of the Corporation and fair to
all shareholders of 20-20 Technologies, except for Mignault Holding
Inc., an interested party. The Board also has determined (with the
interested director abstaining) to unanimously recommend to the
Corporation's shareholders that they approve the transaction and vote
in favour of the transaction.
TD Securities Inc., the financial advisor to 20-20 Technologies, has
provided an opinion to the Corporation's Board of Directors that, as of
the date of such opinion and based upon and subject to the scope of
review, assumptions, limitations, qualifications and other matters
described in such opinion, the consideration to be received by 20-20
Technologies shareholders, other than Mignault Holding Inc., pursuant
to the Agreement is fair, from a financial point of view, to such
SHAREHOLDER VOTING SUPPORT AGREEMENTS
All of the directors and senior officers of 20-20 Technologies, Mignault
Holding Inc., Société Financière Bourgie Inc., Desjardins Venture
Capital, L.P., and Capital Régional et Coopératif Desjardins, holding,
collectively, approximately 43% of the outstanding shares, have entered
into voting support agreements with Vector whereby they have agreed, to
vote in favour of, and support, the transactions contemplated by the
Agreement. Collectively, the voting support agreements and confirmation
of arm's length investors, together with the voting agreements of the
directors and senior officers of the Corporation, represent over 50% of
the outstanding shares of the Corporation.
INTEREST OF FOUNDER AND CHAIRMAN
In connection with the transaction, Mr. Mignault, Founder and Executive
Chairman of the Board, has agreed to sell, through Mignault Holding
Inc., approximately 80% of his interest in the Corporation for the cash
consideration pursuant to the arrangement, and will receive an equity
interest of up to 9.9% in the acquiring company for the remaining 20%
of his interest. In addition, Mr. Mignault will continue as Board
member and in the role of Chief of Strategic Direction.
Jean Mignault indicated: "The decision to initiate a strategic review
process was a difficult one to make, but this outcome is the right one
for all the stakeholders of the Corporation. Our vision from the outset
has always been to build a software platform even more firmly
establishing 20-20 Technologies as the worldwide leader in our vertical
industry. Vector shares our vision for the future and therefore we
strongly support the proposed transaction."
DETAILS OF THE ARRANGEMENT
The transaction will be implemented by way of a statutory plan of
arrangement under the Québec Business Corporations Act and will be subject to approval by at least two-thirds of the votes
cast by the holders of the Corporation's shares, and by a simple
majority of the votes cast by all shareholders other than Mignault
Holding Inc. Once approved by the shareholders, the plan of arrangement
will then have to be sanctioned by the Superior Court of Québec.
The Agreement provides for, among other things, a non-solicitation
covenant on the part of 20-20 Technologies and a right to match in
favor of Vector. The Agreement also provides for the payment of a
termination fee to Vector in the amount of $3 million and expense
reimbursement in the amount of $720,000 (which shall be fully credited
against any termination fee payable by 20-20), and for the payment of a
reverse termination fee to 20-20 Technologies in the amount of $4.5
million, under certain circumstances. The transaction will also be
subject to certain other customary conditions described in the
Agreement, including no material adverse change in the Corporation's
business. The transaction is not subject to any financing condition. It
is anticipated that the plan of arrangement, if approved by the
Corporation's shareholders, will be completed shortly after the Special
Meeting expected to be held in September 2012.
A copy of TD Securities Inc.'s fairness opinion, a description of the
various factors considered by the Board of Directors of the Corporation
in its determination to approve the transaction, as well as other
relevant background information, will be included in the Information
Circular to be mailed on or about August 9, 2012 to the Corporation's
shareholders in advance of the Special Meeting to vote on the plan of
arrangement. Copies of the Information Circular, the Agreement, the
plan of arrangement and certain related documents will be filed with
Canadian securities regulators and will be available on SEDAR (www.sedar.com) as part of the Corporation's public filings.
TD Securities Inc. is acting as financial advisor and Stikeman Elliott
LLP is acting as legal counsel to 20-20 Technologies. Fasken Martineau
DuMoulin LLP is acting as legal advisor to the Special Committee.
Osler, Hoskin & Harcourt LLP is acting as legal advisor to Vector.
ABOUT 20-20 TECHNOLOGIES INC.
20-20 Technologies is the world's leading provider of computer-aided
design, business and manufacturing software tailored for the interior
design and furniture industries. Dealers and retailers use our desktop
and Web-based products for the home and office markets. 20-20 offers a
unique end-to-end solution, integrating the entire breadth of functions
in interior design. It provides a bridge for data communication from
the point-of sale to manufacturing, including computer-aided
engineering and plant floor automation software. Operating in eleven
countries with more than 500 employees and an extensive network of
partners worldwide, 20-20 is a publicly traded company (TWT) on the
Toronto Stock Exchange (TSX). For more information, visit www.2020technologies.com.
ABOUT VECTOR CAPITAL
With over US$2 billion of capital, Vector Capital is a leading global
private equity firm specializing in spinouts, buyouts and
recapitalizations of established technology businesses. Vector
identifies and pursues these complex investments in both the private
and public markets. Vector actively partners with management teams to
devise and execute new financial and business strategies that
materially improve the competitive standing of these businesses and
enhance their value for employees, customers and shareholders. Among
Vector's notable investments are Aladdin Knowledge Systems, Cambium
Networks, Certara, Corel, Gerber Scientific, LANDesk, Precise Software,
Printronix, RAE Systems, Register.com, SafeNet, Savi Technology,
Technicolor, Tidel Engineering, Trafficmaster, WatchGuard Technologies,
and WinZip. For more information, please visit www.vectorcapital.com.
Certain statements made in this release, including those concerning the
expected closing of the transaction referred to herein, are
forward-looking statements that involve risks and uncertainties, which
may prevent expected future results from being achieved. For those
statements, 20-20 Technologies claims the protection of the safe
harbour for forward-looking statements contained in Canadian securities
laws. 20-20 Technologies cautions that actual future performance could
be affected by a number of factors, including the fact that the
expected closing of the transaction referred to in this release is
subject to customary closing conditions, many of which are beyond the
Corporation's control, and termination rights available to the parties
under the Arrangement Agreement. Therefore, future events and results
may vary substantially from what 20-20 Technologies currently foresees.
Additional information identifying risks and uncertainties is contained
in the Corporation's filings under applicable securities laws,
available at www.sedar.com.
SOURCE: 20-20 TECHNOLOGIES INC.
For further information:
Jean-François Grou, Chief Executive Officer
(514) 332-4112 firstname.lastname@example.org
Aalok Jain, Vice President
(415) 293-5000 email@example.com