Reading time ( words)
SMART Technologies Inc., a leading provider of collaboration solutions, and Foxconn Technology Group today announced they have entered into an arrangement agreement under which Foxconn has agreed to acquire all of the outstanding common shares of SMART for a cash payment of US$4.50 per Common Share. The US$4.50 per Common Share purchase price represents a premium of approximately 21% to the volume weighted average price over the last 90 trading days prior to announcement of the Arrangement on the NASDAQ Stock Market.
"We are very excited by the proposed acquisition of SMART by Foxconn, who is the world's largest electronics manufacturer," saidNeil Gaydon, President and CEO of SMART. "SMART has built an enviable global brand in both the education and enterprise spaces. The proposed transaction with Foxconn provides us with one of the strongest global electronics partners with access to significant resources, a broad range of new technologies, markets and financial resources that will enable us to accelerate our strategy and position SMART for significant future growth."
The Arrangement Agreement
The Arrangement Agreement provides for the implementation of the Arrangement by means of a plan of arrangement under theBusiness Corporations Act (Alberta). The Arrangement Agreement contains customary representations and warranties of each party, non-solicitation and interim operations covenants by SMART, and right to match provisions in favour of Foxconn. The Arrangement Agreement provides that any subsidiary of Hon Hai Precision Industry Co., Ltd. may participate in the investment in SMART, and strategic partners designated by Hon Hai Precision Industry Co., Ltd. may, collectively, participate in up to 33 1/3% of the investment. Further, the Arrangement Agreement provides that a termination fee of US$8.9 million will be payable by SMART in certain circumstances, including if SMART enters into an agreement with respect to a superior proposal or if its Board of Directors fails to recommend the proposed Arrangement to shareholders in the prescribed manner.
The Arrangement is subject to customary conditions for a transaction of this nature, which include court and regulatory approvals (including the approval of the TSX) and the approval of 66 2/3% of the votes cast by SMART shareholders represented in person or by proxy at a meeting of SMART shareholders to be called to consider the Arrangement (the "Special Meeting").
All of the directors, certain of the officers of SMART and certain of its shareholders, representing an aggregate of approximately 68% of the issued and outstanding Common Shares, have entered into lockup agreements pursuant to which they have agreed to, among other things, support the Arrangement and vote their Common Shares in favour of the Arrangement, subject to the terms of such agreements.
An information circular regarding the Arrangement is expected to be mailed to shareholders in June 2016 and a meeting of shareholders is expected to be held in July 2016 with closing to occur thereafter. A copy of the Arrangement Agreement will be filed on SMART's profile on SEDAR and EDGAR and will be available for viewing at www.sedar.com and www.sec.gov, respectively.
Recommendation of the Board of Directors
After consulting with its financial and legal advisors, the Board of Directors of SMART unanimously approved the Arrangement. The Board of Directors recommends that shareholders vote in favour of the Arrangement.