TORONTO, Jan. 26, 2017 /CNW/ - Redknee Solutions Inc. ("Redknee" or the "Company") (TSX: RKN) is pleased to announce that, further to its press release on January 25, 2017, it has successfully completed a private placement to Wave Systems Corp. (the "Investor"), an affiliate of ESW Capital, LLC ("ESW Capital"), of 800,000 Series A Preferred Shares (the "Preferred Shares") of the Company and a warrant (the "Warrant") to purchase 46,285,582 common shares in the capital of the Company ("Common Shares") for an exercise price of US$1.2963 per Common Share for gross proceeds of US$83.2 million (the "Transaction") pursuant to the terms of a subscription agreement (the "Subscription Agreement") among the Company, ESW Capital and the Investor.
On January 25, 2017, the Company announced that the Transaction received shareholder approval at a special meeting of shareholders held earlier that day (the "Meeting"). The net proceeds from the Transaction were used to repay the indebtedness of the Company of approximately US$53 million under the Company's senior secured credit facility, with the balance to be used to fund the Company's previously announced restructuring costs and working capital.
Under the terms and conditions of the Subscription Agreement, and following receipt of shareholder approval at the Meeting, the Company also terminated its Shareholder Rights Plan dated March 9, 2016 (the "Plan").
After the closing of the Transaction, the board of directors of the Company (the "Board") accepted the resignations of Dahra Granovsky, Greg Jacobsen and Steve Davies as directors and appointed to the Board Demetrios Anaipakos, Scott Brighton, Chris Helling and Andrew Price, the nominees of the holder of the Preferred Shares, to hold office until the close of the next annual meeting of the holders of the Preferred Shares or until their successors are elected or appointed.
The Company has provided an undertaking to the Toronto Stock Exchange to seek shareholder approval to redesignate its Common Shares as "subordinate voting shares" at its upcoming annual general meeting in March 2017 as requested by the Toronto Stock Exchange.
Following the closing of the Transaction, to the best of the Company's knowledge, ESW Capital and the Investor (the "ESW Capital Group") hold 800,000 Preferred Shares, the Warrant and 14,106,300 Common Shares, representing approximately 13.0% of the issued and outstanding Common Shares on a non-diluted basis. On a partial-diluted basis, assuming full exercise of the Warrant and no change in the number of Common Shares held by the ESW Capital Group, the ESW Capital Group would hold 60,391,882 Common Shares representing approximately 39% of the issued and outstanding Common Shares.
Details of the Subscription Agreement, the Transaction and the termination of the Plan are contained in the management information circular of the Company dated December 27, 2016, which can be found at www.sedar.com.
Redknee monetizes today's digital world. We provide a complete portfolio of mission-critical monetization and subscriber management solutions and services that allow communications service providers, utility companies, auto makers and enterprise businesses of all types to charge for things in new and innovative ways. Redknee's real-time billing, charging, policy and customer care offerings provide the agility and scalability to drive a unique user experience, increase profitability and support any new product or business model. Available on premise, cloud-based, or as a Software-as-a-Service, Redknee's low-risk, flexible solutions power more than 250 businesses across the globe. Established in 1999, Redknee Solutions Inc. (TSX: RKN) is the parent of the wholly-owned operating subsidiary Redknee Inc. and its various subsidiaries. References to Redknee refer to the combined operations of those entities. For more information about Redknee and its solutions, please go to www.redknee.com.
About ESW Capital, LLC
Based in Austin, Texas, the ESW Capital group (www.eswcapital.com) focuses on buying, strengthening, and growing mature business software companies. By taking advantage of its unique operating platform, ESW revitalizes its acquisitions for sustainable success while making customer satisfaction a top priority. The ESW family of companies have been in the enterprise software space since 1988, and the group includes notable brands such as Aurea, Ignite Technologies, Trilogy, and Versata. For more information, email firstname.lastname@example.org.
Certain statements in this document may constitute "forward-looking" statements regarding Redknee and its business, which may include, but are not limited to the Company's expected use of the net proceeds of the Transaction, the shareholdings of the ESW Group on exercise of the Warrant, matters to be voted on at the Company's next annual general meeting, the date of the Company's next annual general meeting and similar statements concerning anticipated future events, results, circumstances, performance or expectations, that reflect management's current expectations and are based on information currently available to management or Redknee. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future. Persons reading this news release are cautioned that such information may not be appropriate for other purposes. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future events or results, and will not necessarily be accurate indications of whether or not such events or results will be achieved. Actual events or results could differ materially from those contemplated in forward-looking statements as a result of risks and uncertainties relating to among other things, litigation proceedings related to the Transaction, and the occurrence of a material adverse change in the business, operating results or financial condition of Redknee, and other factors discussed under the "Risk Factors" section of Redknee's most recently filed annual information form and management's discussion and analysis for the fiscal year ended September 30, 2016, which are available on SEDAR at www.sedar.com and on Redknee's web-site at www.redknee.com. Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual events or results to differ materially from those in the forward-looking statements. Redknee does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.
SOURCE Redknee Solutions Inc.
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