Crescendo Partners Sends Letter to Redknee Solutions Inc. Board of Directors

Urges Board to Immediately Pursue a Sale of the Company to Maximize Shareholder Value

NEW YORK, Aug. 11, 2016 /CNW/ - Crescendo Partners today announced that it has delivered a letter to the Board of Directors of Redknee Solutions Inc. ( Redknee or the "Company") (TSX:RKN).

In the letter, Crescendo Partners urges the Board to immediately commence a broad sale process for the entire Company.  Crescendo believes that numerous potential buyers would be interested in acquiring Redknee because of its strong brand reputation, valuable customer relationships, large backlog, discount to intrinsic value and opportunity to return to historical profitability.  The full text of the letter follows:

Crescendo Partners
777 Third Avenue, Floor 37
New York, NY 10022
(212)-319-7676

Members of the Board of Directors                                                                            August 11, 2016
c/o Kent Thexton
Redknee Solutions Inc.
2560 Matheson Blvd East
Suite 500
Mississauga, ON
Canada L4W 4Y9

Dear Board Members,

              Crescendo Partners, together with its affiliates ("Crescendo"), is a significant stockholder of Redknee Solutions Inc. ("Redknee" or the "Company"). We were initially attracted to Redknee due to its strong technology, high recurring revenue business model and extremely attractive valuation.  Based on what we perceive to be extremely undervalued shares, we were not surprised when ESW Capital, LLC a private investment firm whose motto is to "acquire, transform and run" software companies, filed an early warning report yesterday disclosing ownership of approximately 11.55% of the Company's outstanding shares. 

            While we see significant value in Redknee's business, we recognize that the Company has consistently underperformed its peers and disappointed the financial markets.  We have lost confidence in the current Board and management team's ability to create value for shareholders and believe that the Company should immediately commence a strategic process to sell itself.  We believe that there is value to be obtained that is substantially in excess of the current stock price and that it is the obligation of this board to make every effort to deliver that value to shareholders. If the current board cannot bring out the value, Crescendo Partners intends to nominate directors for next year's Annual Meeting of Shareholders.

             We believe that many of the features that attracted us to Redknee will also attract numerous potential buyers, both strategic and financial, if the Company decides to start a sales process. We believe that potential buyers would be interested in acquiring Redknee due to its strong brand reputation, valuable customer relationships, large backlog, discount to intrinsic value and opportunity to return to historical profitability.  We strongly believe that many of the Company's shareholders would agree that a sale of the Company is the most effective way to maximize stockholder value.

             With an average holding period in excess of three years, Crescendo Partners is a long-term value-oriented investor. However, in the case of Redknee, we do not have confidence that business as usual is an acceptable strategy. We urge the Company to set up a special committee of independent directors and hire investment bankers to run a broad sale process.  As noted above, Crescendo plans to nominate directors for next year's Annual Meeting if the Company has not taken the appropriate steps to maximize shareholder value. We previously had representatives on the board of Bridgewater Systems, another Canadian company that sold software to telecommunications firms and shareholders reaped large profits when that company was sold with our assistance several years ago.

Yours truly,

(signed)

Eric Rosenfeld
Chairman and CEO

ABOUT CRESCENDO PARTNERS

Crescendo Partners is a value-oriented, activist investment firm that invests in small- and mid-cap companies in the United States and Canada.  Over the past 18 years Crescendo has had representatives on the boards of 23 companies.

SOURCE Crescendo Partners

For further information: Eric Rosenfeld, Contact #: 212-319-7676

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