Absolute shareholders to receive US$11.50 per share in cash
- The transaction is valued at US$657 million exclusive of
Absolute’s debt
- The purchase price represents a premium of approximately 34%
over Absolute’s closing share price of US$8.58 on May 10, 2023
Absolute Software™ (“Absolute” or the “Company”)
(NASDAQ: ABST) (TSX: ABST), the only provider of self-healing,
intelligent security solutions, today announced it has entered into
an Arrangement Agreement with funds affiliated with Crosspoint
Capital Partners, L.P. (“Crosspoint”), (the “Arrangement
Agreement”) whereby Crosspoint has agreed to acquire all of the
issued and outstanding common shares (the "Common Shares")
of the Company (the “Acquisition”).
Under the terms of the Arrangement Agreement, Absolute
shareholders will receive US$11.50 per Common Share in cash on
completion of the Acquisition, corresponding to an enterprise value
of approximately US$870 million, inclusive of the debt. The cash
consideration represents a premium of 34% and 38% to the closing
price and 30-day volume-weighted average price, respectively, of
the Common Shares on the Nasdaq on May 10, 2023.
Crosspoint Capital is a team of world-class technology leaders,
operators and investors who have dedicated their careers to
building great companies. Crosspoint brings significant
cybersecurity expertise that will help drive the Company's next
phase of growth.
“In the modern remote and hybrid work environment, maintaining
device integrity and protection is more difficult than ever,” said
Greg Clark, Managing Partner of Crosspoint Capital Partners. “We
are impressed with how Absolute has built upon its asset visibility
and control heritage and expanded into solutions that provide
endpoint resilience and the reliable access needed in today’s
hybrid work environments. We look forward to partnering with
Christy and the Absolute team as they continue to deliver highly
differentiated solutions to the market.”
“For the past five years, our focus has been on creating the
industry’s only truly self-healing security platform centered on
resilience,” said Christy Wyatt, President and CEO of Absolute. “By
partnering with Crosspoint, a proven cybersecurity investor with a
track record in building growth companies, we are delivering
immediate cash value to our shareholders, while positioning
Absolute for an exciting future across all key stakeholders,
including Absolute team members throughout the organization, our
OEM partners and reseller network, and our more than 21,000
customers around the world.”
Quote from the Absolute Board
"This transaction with Crosspoint validates the attractive
business and growth profile established by Christy and her team and
delivers a solid return to the shareholders who have supported
Absolute,” said Dan Ryan, Chairman of Absolute’s Board of Directors
(the “Board”). “By partnering with a proven private software
investor, Absolute will be in a stronger position both
strategically and with respect to its capital structure to achieve
its growth potential.”
Acquisition Details
The Acquisition, which was approved unanimously by the Board, is
to be carried out by way of a statutory court-approved plan of
arrangement under the Business Corporations Act (British Columbia),
and will require the approval of: (i) two-thirds of the votes cast
by shareholders of the Company at a special meeting of the
securityholders of the Company (the “Special Meeting”); (ii)
two-thirds of the votes cast by shareholders and holders of
incentive awards, voting together as single class, at the Special
Meeting and (iii) a simple majority of the votes cast by
shareholders of the Company at the Special Meeting, excluding votes
from certain shareholders, as required under Multilateral
Instrument 61-101 – Protection of Minority Security Holders in
Special Transactions (“MI 61-101”). The Special Meeting is
expected to be held in late June.
The Company's directors and senior executive officers, holding
an aggregate of approximately 1.52% of the outstanding Common
Shares, have each entered into support and voting agreements to
vote their shares in favour of the Acquisition. In addition to
securityholder approval, the completion of the Acquisition will be
subject to court and regulatory approvals and clearances, as well
as other customary closing conditions. Subject to the satisfaction
of such conditions, the Acquisition is expected to be completed
during the second half of 2023.
Upon completion of the Acquisition, the Common Shares will no
longer be listed on any public market and the Company will cease to
be a reporting issuer under Canadian and U.S. securities laws.
Further details with respect to the Acquisition will be included
in the management information circular (the “Circular”) to be
mailed to security holders in connection with the Special Meeting.
A copy of the Arrangement Agreement will be filed on the Company's
SEDAR profile and with the U.S. Securities and Exchange Commission
and will be available for viewing at www.sedar.com and
www.sec.gov.
Absolute Board of Directors and Special Committee
Recommendations
A special committee comprised entirely of independent directors
of the Company (the "Special Committee") and advised by its
financial advisor and by counsel unanimously recommended entering
into the Arrangement Agreement to the board of directors of the
Company (the "Board"). The Board has evaluated the
Arrangement Agreement with the Company’s management, legal and
financial advisors and, following the receipt and review of the
unanimous recommendation from the Special Committee, the Board has
unanimously approved the Acquisition and determined that the
Acquisition is in the best interest of the Company. The Board has
resolved to recommend that the Company’s securityholders vote in
favour of the Acquisition.
Amendments to the BSP Credit Agreement
In anticipation of a potential transaction, Absolute amended the
terms of its senior credit agreement with Benefit Street Partners
(BSP). A further amendment was subsequently made to facilitate
entry by Absolute into the Arrangement Agreement. Absolute will
have to pay a fee to Benefit Street Partners in consideration for
the amendments to the credit agreement upon consummation of the
Acquisition.
Third Quarter 2023 Financial Results
Absolute will announce its financial results for its third
quarter on May 15, 2023. The news release will be available on the
investor relations section of the Company’s website. In light of
the Acquisition, Absolute will be cancelling the conference call
originally scheduled for 5:00PM ET on that day.
Dividend
As previously declared, Absolute will be paying a dividend of
CAD $0.08 per share on its Common Shares, payable in cash on May
24, 2023 to shareholders of record at the close of business on May
11, 2023. As a part of the definitive agreement, Absolute will
suspend its dividend going forward.
Advisors and Counsel
Perella Weinberg Partners is serving as Absolute’s financial
advisor in connection with the Acquisition, with Raymond James Ltd.
also providing financial advice to the Special Committee. The
Company's legal advisors in connection with the Acquisition are
Cooley LLP and Blake, Cassels & Graydon, LLP.
Ropes & Gray and Stikeman Elliott acted as legal advisors
and Barclays acted as financial advisor to Crosspoint.
About Absolute Software
Absolute Software (NASDAQ: ABST) (TSX: ABST) is the only
provider of self-healing, intelligent security solutions. Embedded
in more than 600 million devices, Absolute is the only platform
offering a permanent digital connection that intelligently and
dynamically applies visibility, control and self-healing
capabilities to endpoints, applications, and network connections -
helping customers to strengthen cyber resilience against the
escalating threat of ransomware and malicious attacks. Trusted by
nearly 21,000 customers, G2 recognized Absolute as a Leader for the
thirteenth consecutive quarter in the Spring 2023 Grid® Report for
Endpoint Management and as a Leader for the third consecutive
quarter in the Grid Report for Zero Trust Networking.
About Crosspoint Capital Partners
Crosspoint Capital Partners is a private equity investment firm
focused on the cybersecurity, privacy and infrastructure software
markets. Crosspoint has assembled a group of highly successful
operators, investors and sector experts to partner with
foundational technology companies and drive differentiated returns.
Crosspoint has offices in Menlo Park, CA and Boston, MA. For more
information visit: www.crosspointcapital.com.
Additional Information about the Acquisition and Where to
Find It
Further details regarding the terms of the Acquisition are set
out in the Arrangement Agreement, which will be publicly filed on
Absolute’s SEDAR profile at www.sedar.com and EDGAR profile at
www.sec.gov. Additional information regarding the terms of the
Arrangement Agreement, the background to the Acquisition, the
rationale for the recommendations made by the Special Committee and
the Board and how Absolute’s securityholders can participate in and
vote at the Special Meeting to be held to consider the Acquisition
will be provided in the Circular which will be mailed to
securityholders of the Company and also filed on Absolute’s SEDAR
profile at www.sedar.com and EDGAR profile at www.sec.gov.
Securityholders are urged to read these and other relevant
materials when they become available.
No Offer or Solicitation
This document does not constitute an offer to sell, or the
solicitation of an offer to buy, any securities in any jurisdiction
pursuant to or in connection with the proposed transaction or
otherwise, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable
law.
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain forward-looking statements
and forward-looking information, as defined under applicable U.S.
and Canadian securities laws (collectively, "forward-looking
statements"). The words “will”, “intend”, “anticipate”,
“could”, “should”, “may”, “might”, “expect”, “estimate”,
“forecast”, “plan”, “potential”, “project”, “assume”,
“contemplate”, “believe”, “shall”, “scheduled”, and similar terms
and, within this press release, include, without limitation, any
statements (express or implied) respecting: [anticipated timing of
the mailing of the information circular, the holding of the Special
Meeting]; the proposed timing and completion of the Acquisition;
approval of the Acquisition by Absolute securityholders at the
Special Meeting; the satisfaction of the conditions precedent to
the Acquisition; timing, receipt and anticipated effects of court
and other approvals; the delisting from the TSX and NASDAQ and the
closing of the Acquisition and other statements that are not
statements of historical facts. Forward-looking statements are not
guarantees of future performance, actions, or developments and are
based on expectations, assumptions and other factors that
management currently believes are relevant, reasonable, and
appropriate in the circumstances.
Although management believes that the forward-looking statements
herein are reasonable, actual results could be substantially
different due to the risks and uncertainties associated with and
inherent to Absolute’s business (as more particularly described in
the “Risk and Uncertainties” section of Absolute’s Q2 F2023
Management’s Discussion and Analysis, which is available at
www.absolute.com and under Absolute’s SEDAR profile at
www.sedar.com and on EDGAR at www.sec.gov), as well as the
following particular risks: risks that a condition to closing of
the Acquisition may not be satisfied; risks that the requisite
securityholder approval, court or other applicable approvals for
the Acquisition may not be obtained or be obtained subject to
conditions that are not anticipated; the effect of the announcement
of the proposed Acquisition on the ability of Absolute to retain
and hire key personnel and maintain business relationships with
customers, suppliers and others with whom they each do business, or
on Absolute’s operating results; the market price of common stock
and business generally; potential legal proceedings relating to the
proposed Acquisition and the outcome of any such legal proceeding;
the inherent risks, costs and uncertainties associated with
transitioning the business successfully and risks of not achieving
all or any of the anticipated benefits of the Acquisition, or the
risk that the anticipated benefits of the Acquisition may not be
fully realized or take longer to realize than expected; the
occurrence of any event, change or other circumstances that could
give rise to the termination of the Arrangement Agreement; the risk
that the Acquisition will not be consummated within the expected
time period, or at all; competitive changes in the marketplace
including, but not limited to, the pace of growth or adoption rates
of applicable products or technologies; downturns in the business
cycle; and worldwide economic and political disruptions as a result
of current events.
Actual results or events could differ materially from those
contemplated in forward-looking statements as a result of, without
limitation, the following: the ability to secure the required
securityholder or court approvals; the occurrence of a “Material
Adverse Effect” (as defined in the Arrangement Agreement), the
receipt of a superior proposal, or the failure by either party to
satisfy any other closing condition in favour of the other provided
for in the arrangement agreement, which condition is not waived;
general business, economic, competitive, political and social
uncertainties; and the future performance, financial and otherwise,
of Absolute. All forward-looking statements included in this press
release are expressly qualified in their entirety by these
cautionary statements. The forward-looking statements contained in
this press release are made as at the date hereof and Absolute
undertakes no obligation to update publicly or to revise any of the
included forward-looking statements, whether as a result of new
information, future events, or otherwise, except as may be required
by applicable securities laws.
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version on businesswire.com: https://www.businesswire.com/news/home/20230511005487/en/
Investor Relations Joo-Hun Kim IR@absolute.com
212-868-6760
Media Relations Becki Levine press@absolute.com
858-524-9443
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