Vector Capital Will Commence Tender Offer for All Outstanding SafeNet
Shares for $28.75 Per Share in Cash
BALTIMORE, March 5 /CNW/ - SafeNet, Inc. (NASDAQ: SFNT), setting the
standard for information security, today announced that it has entered into a
definitive agreement to be acquired by an investor group led by Vector Capital
in a transaction valued at approximately $634 million. The $28.75 per share
price represents a premium of 12% over the SafeNet average closing share price
during the 30 trading days ended March 2, 2007 and a 57% premium over its
closing stock price on October 2, 2006, the last date before the Company
commenced intensive efforts to explore its strategic alternatives.
Under the terms of the agreement, a subsidiary of Vector Capital (Stealth
Acquisition Corp.) will commence a tender offer to acquire all of the
outstanding shares of SafeNet common stock for $28.75 per share in cash. The
offer is expected to commence on or before March 12, 2007, and will expire at
midnight on the 20th business day following and including the commencement
date, unless extended in accordance with the terms of the merger agreement and
the applicable rules and regulations of the Securities and Exchange Commission
The Board of Directors of SafeNet unanimously approved the definitive
agreement and recommends that shareholders tender their shares into the tender
offer. Members of SafeNet's Board have agreed to tender their shares.
Walter Straub, SafeNet's Chairman and CEO, said, "Over the past five
months, our Board of Directors engaged in an extremely thorough review of all
strategic options available to the Company, including a broad solicitation
process that resulted in significant competitive interest in our Company.
Based on this comprehensive process, the Board determined that being acquired
by Vector Capital and its partners represents a compelling opportunity that is
in the best interest of our shareholders, customers and employees."
"In Vector, we have identified a partner that is committed to assisting
the Company to fully realize its opportunities while we continue to address
our issues and build momentum in our business," continued Straub.
Chris Nicholson, a Partner at Vector, said, "SafeNet's full suite of
leading government and industry security solutions uniquely position the
Company with its strong customer base, and we look forward to working with
SafeNet's talented employees and management team to build lasting value for
the Company and its customers."
David Fishman, a Principal at Vector commented, "The challenges of being
a public company today can sometimes inhibit growth in companies like SafeNet.
We believe SafeNet will significantly benefit from being a private company,
and will be in a better position to help achieve its goal of providing leading
security solutions to both its Government and Commercial customers."
The tender offer is conditioned upon, among other things, approximately
78% of SafeNet's shares being tendered in the offer based on the current
shares and options outstanding. If the Company becomes current in its SEC
filings, the minimum tender condition will be reduced to a majority of the
fully diluted eligible shares.
The transaction is not subject to any financing condition. The
transaction will be financed through a combination of equity and debt, with
the debt financing committed by Deutsche Bank and Citigroup Global Markets and
the equity committed by Vector and certain of its partners. Provided that the
minimum tender condition is met, the transaction is expected to be completed
during the second quarter of 2007, subject to customary closing conditions and
regulatory approvals. There can be no assurance that the transaction will be
approved or consummated.
Merrill Lynch is acting as financial advisor to SafeNet, Inc., and
Wachtell, Lipton, Rosen & Katz is acting as the Company's legal advisor.
Credit Suisse also was retained to provide certain financial advisory services
to the Board of Directors of SafeNet. O'Melveny and Myers is acting as legal
advisor to Vector Capital. Deutsche Bank served as lead financial advisor and
co-lead arranger of the debt financing and Citigroup Global Markets Inc.
served as co-advisor and co-lead arranger.
About SafeNet, Inc.
SafeNet is a global leader in information security. Founded more than 20
years ago, the company provides complete security utilizing its encryption
technologies to protect communications, intellectual property and digital
identities, and offers a full spectrum of products including hardware,
software, and chips. UBS, Nokia, Fujitsu, Hitachi, Bank of America, Adobe,
Cisco Systems, Microsoft, Samsung, Texas Instruments, the U.S. Departments of
Defense and Homeland Security, the U.S. Internal Revenue Service and scores of
other customers entrust their security needs to SafeNet. For more information,
About Vector Capital
Vector Capital is a leading private equity firm specializing in buyouts,
spinouts 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
Savi Technology, LANDesk Software, Corel Corporation (Nasdaq: CREL),
Register.com, and Watchguard Technologies. For more information, visit
Forward Looking Statements. Statements made in this release, our website
and in our other public filings and releases, which are not historical facts
contain "forward-looking" statements (as defined in the Private Securities
Litigation Reform Act of 1995) that involve risks and uncertainties and are
subject to change at any time. These forward-looking statements may include,
but are not limited to, statements containing words such as "anticipate,"
"contemplate," "believe," "plan," "estimate," "expect," "intend," "may,"
"target," "look forward to" and similar expressions. Factors that could cause
actual results to differ materially include, but are not limited to, the
following: costs, litigation, an economic downturn or changes in the laws
affecting our business in those markets in which we operate, other economic,
business, competitive, and/or regulatory factors affecting our business
including those set forth in our public filings, costs related to the proposed
merger and tender offer, the risk of failing to obtain any required
stockholder approvals or meet minimum tendering conditions or other
conditions, the risk that the transaction will not close or that such closing
will be delayed, and the risk that our business will suffer due to
uncertainty. There can be no assurance that the tender offer and second-step
merger or any other transaction will be consummated, or if consummated, that
it will increase shareholder value. The forward-looking statements involve
known and unknown risks, uncertainties and other factors that are, in some
cases, beyond our control. We caution investors that any forward-looking
statements made by us are not guarantees of future performance or events. We
disclaim any obligation to update any such factors or to announce publicly the
results of any revisions to any of the forward-looking statements to reflect
future events or developments, except to the extent required by law.
Additional Information and Where to Find It. In connection with the
tender offer, SafeNet expects to file a solicitation/recommendation statement
on Schedule 14D-9 with the Securities and Exchange Commission (the "SEC"). In
connection with the proposed merger, SafeNet expects to file a proxy statement
with the SEC, if required by law. Investors and security holders are strongly
advised to read these documents when they become available because they will
contain important information about the tender offer and the proposed merger.
Free copies of materials which filed by SafeNet will be available at the SEC's
web site at www.sec.gov, or at the SafeNet web site at www.safenet-inc.com or
www.safenetinvestor.com and will also be available, without charge, by
directing requests to SafeNet, Investor Relations: Gregg Lampf, 4690
Millennium Drive Belcamp, Maryland 21017, 443-327-1532. SafeNet and its
directors, executive officers and other members of its management and
employees may be deemed participants in the solicitation of tenders or proxies
from its shareholders. Information concerning the interests of SafeNet's
participants in the solicitation is set forth in SafeNet's proxy statements
and other public filings with the SEC, and will be set forth in proxy
statements relating to any merger, if one is required to be filed, and in the
solicitation/recommendation statements on Schedule 14D-9 when they become
This document is for informational purposes only and is not an offer to
buy or the solicitation of an offer to sell any securities. The solicitation
and the offer to buy shares of SafeNet's common stock will only be made
pursuant to an offer to purchase and related materials that Stealth
Acquisition Corp. intends to file with the Securities and Exchange Commission.
Once filed, SafeNet stockholders should read these materials carefully prior
to making any decisions with respect to the offer because they contain
important information, including the terms and conditions of the offer. Once
filed, SafeNet stockholders will be able to obtain the offer to purchase and
related materials with respect to the offer free of charge at the SEC's
website at www.sec.gov, from the information agent named in the tender offer
materials or from Stealth Acquisition Corp.
For further information:
For further information: SafeNet, Inc. Public Relations: Donna St.
Germain, 443-327-1474 firstname.lastname@example.org www.safenet-inc.com or
Investor Relations: Gregg Lampf, 443-327-1532 email@example.com