OTTAWA, March 27 /CNW/ - Wi-LAN Inc. (TSX: WIN) ("Wi-LAN") and Tri-Vision
International Ltd. (TSX: TVL) ("Tri-Vision) are pleased to announce that they
have signed a non-binding letter of intent ("LOI") for a business combination
under which Tri-Vision's common shares would be exchanged for common shares of
Wi-LAN based on a price of $1.72 per Tri-Vision common share (the
"Transaction"). On a fully-diluted basis, the Transaction values Tri-Vision at
approximately $108 million.
Following the proposed Transaction, Wi-LAN would have the following
- The leading Canadian intellectual property ("IP") licensing company,
with a strong communications portfolio of fundamental patents in
V-chip, Wi-Fi, WiMAX, CDMA, and DSL
- Strong future cash flows from Tri-Vision's licensees. Approximately
25% of U.S. digital TV unit shipments and 98% of Canadian TV unit
shipments have been licensed already, leaving significant future
license revenues from both existing and future licensees. Tri-Vision
owns the rights to V-chip patents in Canada, and the US where the
Federal Communications Commission ("FCC") has mandated the inclusion
of upgradeable V-Chips for all TV receivers and other broadcast
reception devices (including VCRs, set-top boxes, and digital video
- Strong cash position, with over $100 million in cash to fund
licensing operations, litigation and further IP acquisitions
- Considerable negotiation leverage across common licensing targets -
combining Tri-Vision's and Wi-LAN's intellectual property greatly
enhances leverage in licensing negotiations; able to pursue licensees
with several patent families
Jim Skippen, President & Chief Executive Officer of Wi-LAN, said, "The
combination of Wi-LAN and Tri-Vision will create a company that is more than
the combined parts. It will be a world-class IP licensing company with
exciting growth expected from our portfolio of essential patents. This is an
excellent example of growing Wi-LAN's IP portfolio in an adjacent market.
Since many of the licensing targets are similar to both companies, we believe
there will be excellent synergies realized by combining the companies. We
believe that this transaction represents an excellent value proposition for
our shareholders and we will benefit immediately from the revenue flows from
existing Tri-Vision licensees."
"Based on our calculations, and based on forecasts of DisplaySearch and
IDC for digital TV and set-top box growth, the existing licenses of Tri-Vision
should yield approximately $100 Million in future revenues." added Skippen.
"Based on those same forecasts for growth and assuming the remainder of the
Canadian and US markets are signed at the same rates as existing Tri-Vision
license agreements, Wi-LAN should be able to realize total revenues of
approximately $500 Million over the next nine years."
"This Transaction provides tremendous value to Tri-Vision shareholders",
said Tim Collings, Tri-Vision Chairman and inventor of the company's V-chip
technology. "We have always been confident in the strength of our V-chip
technology, but by merging our companies we will benefit from the additional
licensing experience and financial resources of Wi-LAN, particularly in the US
market. We look forward to working closely with Wi-LAN's management to
accelerate the growth of our business," he said.
Summary of the Transaction
Under the proposed Transaction, each Tri-Vision common share would be
exchanged for Wi-LAN common shares with a value of $1.72 on the closing date
subject to the exchange ratio calculations described below. This would
represent a premium of 41.0% to the closing price of Tri-Vision's shares on
the TSX on March 26, 2007 and 41.7% to the 20-day volume weighted average
trading price of Tri-Vision's shares on the TSX prior to that date.
For the purposes of determining the actual exchange ratio, the value of
each issued and outstanding Tri-Vision common share shall be deemed to be
$1.72, and the value of each Wi-LAN common share shall be equal to the volume
weighted average price for a random 10 trading day period in the 20 trading
day period prior to closing, provided that the exchange ratio shall not exceed
.2920 or be less than .2642 shares of Wi-LAN for each share of Tri-Vision.
In the Letter of Intent, Tri-Vision has granted Wi-LAN an exclusivity
period until April 27, 2007 in which to complete due diligence and has agreed
not to solicit other proposals subject to the exercise by the Tri-Vision's
board of its fiduciary duties. In the event that a definitive agreement is not
signed and another party concludes an acquisition of Tri-Vision within six
months from the date of the Letter of Intent, Tri-Vision has agreed to pay
Wi-LAN a termination fee of $2.0 million. The exclusivity period and
termination fee provisions in the Letter of Intent are binding upon
The boards of directors of both companies have unanimously approved
signing the Letter of Intent described in this release. A special committee of
the board of directors of Tri-Vision has been formed to consider the proposed
transaction. Senior officers and directors of Tri-Vision holding over 24% of
Tri-Vision's common shares outstanding have indicated that they will vote in
favour of the Transaction.
The companies have agreed to work towards the signing of definitive
documentation within 30 days, and the Transaction is expected to be completed
in June 2007, following all necessary approvals.
The Transaction remains subject to entering into the definitive agreement
and the satisfaction of customary closing conditions, including any necessary
regulatory approvals. There is no assurance that the Transaction will be
completed, or if completed, that the terms may not change.
It is intended that Tri-Vision will divest its cable TV products and
distribution business. As a result, the potential acquisition of Tri-Vision is
consistent with Wi-LAN's stated goal of being a pure-play patent licensing
Wellington West Capital Markets Inc. is acting as financial advisor to
Wi-LAN, and Acumen Capital Finance Partners Limited is acting as financial
advisor to Tri-Vision.
About Tri-Vision's V-chip Patents
Tri-Vision owns the rights to U.S. V-chip Patent No. 5,828,402 and
Canadian V-chip Patent Nos. 2,179,474 and 2,342,045. The acquisition of
Tri- Vision's V-chip technology adds to Wi-LAN's strong patent portfolio that
includes Wi-Fi, CDMA, DSL, and the emerging WiMAX technology. Wi-LAN will now
hold the key U.S. and Canadian patents for the upgradeable V-chip technology
that has been mandated by the FCC in the United States.
March 1, 2007 marked the official date of the FCC full mandate to include
the flexible V-chip technology in all digital television receivers with or
without an associated display shipped in the United States. All TV receivers
and other broadcast reception devices (e.g. VCRs, set-top boxes, digital video
recorders, etc.) require digital tuners known as "ATSC tuners" which are
necessary to facilitate "open" V-chip software.
Tri-Vision's U.S. Patent licensing campaign now includes 42 licensees,
representing approximately 25% of the U.S. market for digital TV sales.
Tri- Vision has licensed approximately 98% of the Canadian TV market and
resorted to legal action in five cases. All cases reached a favourable
Companies which have been licensed to the U.S. and/or Canadian patents
include: Sony, Hitachi, Sanyo, Pioneer, Philips, JVC, Panasonic, Sharp, LG
Electronics, Samsung, Funai, Orion, Apex, Korat Denki, World, Eastech,
Toshiba, eRAE, Seiko Epson, Xiamen, Shenzhen KXD, NewLane, Konka, TTE, Optoma,
Coretronic, ViewSonic, Syntax-Brillian, NEC, AKAI, Chunghwa, Humax, Shinco,
Jabil Circuit, LiteOn, Top Powersonic, Nakamichi, Emerson Radio, Esto, BenQ,
Runco, Daewoo Tecwell, ProView, Redmond Group, and others.
On February 17, 2009, analog television signals in the U.S. will no
longer be available, and the transition to all digital broadcasting will be
complete. Assuming manufacturers follow the U.S. Government digital tuner
mandate, all television receivers in the U.S. will include digital television
tuners by the end of fiscal 2008. Once the manufacturers are licensed,
Tri- Vision will be entitled to collect royalties on sales that date back to
the beginning of use of Tri-Vision's technology.
Tri-Vision is at various stages in the pursuit of licensing deals with
the remaining manufacturers including major brand and OEM manufacturers with
significant market share. As with the successful Canadian licensing campaign,
it is Tri-Vision's goal to license all digital television receivers sold in
the US market.
Conference Call Information - March 27, 2007 - 10:00AM EDT
Wi-LAN and Tri-Vision will conduct a conference call to discuss the
potential transaction today at 10:00 AM, Eastern Time.
Participants calling from Canada or the U.S. should call toll free:
Callers from other international locations should call: 416.849.9626
Participants are requested to call in 10 minutes before the start of the
For those who prefer to join by webcast, visit www.wi-lan.com. The call
will be archived there.
The Wi-LAN representative will be Jim Skippen, President & CEO. The Tri-
Vision representative will be Tim Collings, Chairman and inventor of the
A replay of the call will be available until 11:59 PM EST on April 3,
- Replay Number (Toll Free): 866.245.6755
- Replay Number (International): 416.915.1035
- Passcode: 624386
About Wi-LAN Inc.
Wi-LAN, which was founded in 1992, licenses intellectual property that
drives a full range of products providing access in wireless and wireline
telecommunications markets. Some of the fundamental technologies covered by
Wi-LAN's patents include: CDMA, Wi-Fi, WiMAX and DSL. Wi-LAN has already
licensed its intellectual property to a number of major companies, including
Cisco, Fujitsu and Nokia.
About Tri-Vision International Ltd.
Tri-Vision International Ltd. was established 1986. The company is
committed to becoming a leading international supplier of V-chip technology,
multi-media and cable television technologies. Tri-Vision has been publicly
listed since 1993, first on the Alberta Stock Exchange and currently on the
Toronto Stock Exchange (TSX) trading under the symbol TVL.
Certain statements in this release, other than statements of historical
fact, may include forward-looking information that involves various risks and
uncertainties. These may include, without limitation, statements based on
current expectations involving a number of risks and uncertainties related to
all aspects of the wireless and wireline communications industry and the
global economy. These risks and uncertainties include, but are not restricted
to: the almost exclusive reliance of the Company on licensing its patent
portfolio to generate revenues and cash flows; that the Company may be
required to establish the enforceability of its patents in court to obtain
material licensing revenues; that the Company will need to acquire or develop
new patents to continue to grow its business; that the Company requires
investment to translate its intellectual property position into sustainable
profit in the market; that the Company is dependent on the performance of its
key officers and employees; that changes in patent legislation or in the
interpretation or application of patent litigation could materially adversely
affect the Company; and that the Company has and may make acquisitions of
products, technologies or businesses which could materially adversely affect
the Company. These risks and uncertainties may cause actual results to differ
from information contained herein, when estimates and assumptions have been
used to measure and report results. There can be no assurance that such
forward-looking statements will prove to be accurate. Actual results and
future events could differ materially from those anticipated in such
statements. These and all subsequent written and oral forward-looking
statements are based on the estimates and opinions of management on the dates
they are made and expressly qualified in their entirety by this notice. The
Company assumes no obligation to update forward-looking statements should
circumstances or management's estimates or opinions change.
All trademarks and brands mentioned in this release are the property of
their respective owners.
For further information:
For further information: Steve Bower, CFO, Wi-LAN, C: (613) 697-7159, O:
(613) 688-4898, E: email@example.com; Lynne Bermel, Director, Corporate
Communications, C: (613) 864-4058, O: (613) 688-4900 ext, 2019, E:
firstname.lastname@example.org; David Garland, CFO, Tri-Vision, O: (416) 298-8551, Email:
email@example.com; Tim Collings, Chairman of the Tri-Vision Board of
Directors, C: (778) 241-2047, E: firstname.lastname@example.org