TORONTO, Feb. 24 /CNW/ - Sirit Inc. ("Sirit") (TSX: SI), a leading provider of radio frequency identification ("RFID") technology, announces that it has signed a second amending agreement with Federal Signal Corporation ("Federal Signal") (NYSE: FSS), for the purpose of amending their previously announced agreement (the "Arrangement Agreement") under which Federal Signal will acquire all of the issued and outstanding common shares of Sirit (the "Common Shares") by way of plan of arrangement. Under the terms of the amended agreement, Sirit shareholders would receive, for each Common Share, $0.46 in cash (instead of $0.43 in cash under the prior amended Federal Signal offer dated February 22, 2010).
All other terms and conditions remain substantially similar to those set out in the Arrangement Agreement as described in detail in the information circular mailed to Sirit shareholders on February 2, 2010 and available on www.sedar.com, except that under the amended agreement the termination fee payable to Federal Signal in certain circumstances has been increased from $2.5 million to $4.0 million.
The increased consideration represents a premium of 110% over Sirit's 30-day average closing stock price, and a premium of 145% over Sirit's 60-day average closing stock price, on the Toronto Stock Exchange prior to the initial announcement by Sirit of the Arrangement Agreement on January 14, 2010. The increased consideration also represents a premium of 53% to the value of the initial Federal Signal offer.
Federal Signal increased the consideration payable to shareholders in connection with Sirit's receipt of an unsolicited and confidential acquisition proposal which Sirit's board concluded was not a Superior Proposal (as defined in the Arrangement Agreement). Sirit's board carefully considered the terms and conditions of the unsolicited acquisition proposal in consultation with its financial and legal advisors and ultimately determined that when taken as a whole, notwithstanding an offer of cash consideration of $0.48, the acquisition proposal did not constitute a Superior Proposal since it included a number of new risks and uncertainties relating to the ability of the acquisition proposal to be completed without undue delay, Sirit's financial position prior to the delayed closing (including the impact of increased transaction costs) and increased regulatory risks.
The previously announced voting and lock-up agreement with Federal Signal under which certain executive officers, directors and shareholders of Sirit owning approximately 28% of the outstanding Common Shares have agreed to vote their shares in favor of the Federal Signal transaction remains in effect.
A shareholders' meeting (the "Meeting") to approve the transaction with Federal Signal, among other things, is currently scheduled to take place at 10:30 a.m. on Friday, February 26, 2010. The Meeting will be held at Suite 1600, 1 First Canadian Place, 100 King Street West, Toronto, Ontario. Sirit does not intend to deliver a supplemental information circular to shareholders in respect of the amended agreement.
Under the terms of Sirit's pre-existing Key Employee Incentive Plan, if more than 50% of the Common Shares are acquired by a third-party for consideration equal to or greater than $0.45 per share, Sirit will become obligated to pay to certain members of its executive management an amount equal to 5% of the gross aggregate proceeds paid by such third party. Federal Signal's second amended offer triggers such a payment in an amount equal to approximately $3.9 million. This payment will not reduce the amount per share payable to each shareholder by Federal Signal at closing and will be a liability that accrues only after Sirit is acquired by Federal Signal. As a result of this payment, in addition to the approval of the Arrangement by two-thirds of the votes cast by shareholders present in person or by proxy at the Meeting, Sirit will be seeking approval of a majority of the votes cast by shareholders present in person or by proxy at the Meeting excluding the votes cast by participants in the Key Employee Incentive Plan.
Sirit does not intend to mail new proxy forms, and does not expect intermediaries to mail new voting instruction forms, to shareholders for use in connection with the Meeting. Instead, the form of proxy and voting instruction forms previously mailed to shareholders will continue to be used for the Meeting. The deadline for the deposit of proxies for use at the Meeting remains 4:00 p.m. (Toronto time) on Thursday, February 25, 2010. Voting instruction forms have to be submitted earlier than forms of proxy. Shareholders who have already properly completed and deposited a proxy or submitted a voting instruction form do not have to take any further action to vote their securities, unless they wish to change their voting instructions. Shareholders who have completed and deposited a form of proxy or submitted a voting instruction form but wish to change their voting instructions should contact Innisfree M&A Incorporated toll-free at 1-877-825-8964 for assistance in doing so (banks and brokers may call collect at 212-750-5883).
About Sirit Inc.
Sirit Inc. (TSX: SI) is a leading provider of Radio Frequency Identification (RFID) technology worldwide. Harnessing the power of Sirit's enabling-RFID technology, customers are able to more rapidly bring high quality RFID solutions to the market with reduced initial engineering costs. Sirit's products are built on more than 16 years of RF domain expertise addressing multiple frequencies (LF/HF/UHF), multiple protocols and are compliant with global standards. Sirit's broad portfolio of products and capabilities can be customized to address new and traditional RFID market applications including Supply Chain & Logistics, Cashless Payment (including Electronic Tolling), Access Control, Automatic Vehicle Identification, Inventory Control & Management, Asset Tracking and Product Authentication. For more information, visit www.sirit.com.
Cautionary Note Regarding Forward-Looking Statements
Except for the statements of historical fact contained herein, the information presented constitutes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and Canadian provincial securities legislation. These forward-looking statements relate to, among other things, Sirit's objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates, and can generally be identified by the use of words such as "may", "will", "could", "should", "would", "suspect", "outlook", "expect", "intend", "estimate", "anticipate", "believe", "plan", "forecast", "objective" and "continue" (or the negative thereof) and words and expressions of similar import, and may include statements concerning possible or assumed future results, financial outlook and/or future-oriented financial information. Although Sirit believes that the expectations reflected in such forward-looking statements are reasonable, such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of Sirit to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting Sirit's business. Important factors that could cause actual results to differ materially from expectations include but are not limited to: (i) the risk and possibility that the transaction entered into by Sirit and Federal Signal will not be approved by Sirit shareholders or the court or otherwise consummated, and if any such transaction is eventually consummated, it may be on different and potentially less favourable terms than the terms of the agreement described above, (ii) economic conditions in various regions, (iii) product and price competition, (iv) supplier and raw material prices, (v) foreign currency exchange rate changes, (vi) interest rate changes, (vii) increased legal expenses and litigation results, (viii) legal and regulatory developments, and (ix) other risks and uncertainties described in filings with the Securities and Exchange Commission. or the securities regulatory authorities in Canada via SEDAR. These and other important risks are discussed in further detail in the section entitled "Risks Factors" in Sirit's Annual Information Form dated March 13, 2009 and in Sirit's management's discussion and analysis found in its 2008 annual report as filed with the securities regulatory authorities in Canada via SEDAR. Although Sirit has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. Unless otherwise required by law, Sirit does not undertake any obligation to update any forward-looking statements contained in this news release as a result of new information, further events or otherwise. This cautionary statement expressly qualifies the forward-looking information in this news release.
"Sirit", the Sirit Design and "vision beyond sight" are all trademarks of Sirit Inc. All other names of actual companies and products mentioned herein may be the trademarks of their respective owners.
SOURCE SIRIT INC.
For further information: For further information: Anastasia Chodarcewicz, Sirit Inc., (416) 367-1897 x227, firstname.lastname@example.org