All Cash Transaction Values the Company at approximately
- HS GovTech shareholders to receive
$0.54 per Share in cash, representing an aggregate transaction value of approximately$33.3 million . - The purchase price represents a 151.2% premium to the closing price of
$0.215 and a 174.1% premium to the 20-day volume weighted price of$0.197 per Share onSeptember 15, 2023 . - Both a special committee comprised of directors of HS GovTech (the "Special Committee") and the board of directors (the "Board") of the Company (with conflicted directors abstaining) unanimously recommend that HS GovTech securityholders vote in favour of the Transaction.
- The Transaction is subject to customary closing conditions, including approval from HS GovTech securityholders.
Pursuant to the terms and conditions of the Arrangement Agreement, the Purhaser has agreed to acquire 100% of the issued and outstanding Shares for consideration of
In connection with entry into the Arrangement Agreement, the Purchaser has also provided a
The Board (other than non-independent directors who abstained from voting on the Transaction), after receiving the unanimous recommendation of the Special Committee, has determined that the Arrangement, including the transactions contemplated thereunder, is fair to holders of Shares (the "Shareholders"), holders of options ("Options") to acquire Shares (the "Option Holders"), holders of restricted share units ("RSUs") to acquire Shares (the "RSU Holders"), and holders of warrants ( "Warrants") to acquire Shares (the "Warrant Holders", together with the Shareholders, the Option Holders, and the RSU Holders, the "Securityholders"), and is in the best interests of the Company. Accordingly, the Board approved the Arrangement Agreement and recommends that Securityholders vote their securities in favour of the Arrangement. In making its recommendation, the Board considered a number of factors, including the receipt of a fairness opinion from
Each of the directors and executive officers of the Company who hold in the aggregate approximately 8.99% of the issued and outstanding Shares (assuming no exercise of existing convertible securities) have entered into voting and support agreements with the Purchaser and have agreed to, among other things, vote their securities in favour of the Arrangement.
Pursuant to the Arrangement, each Share outstanding immediately prior to the effective time of the Arrangement will be transferred to and purchased by the Purchaser for consideration of
The implementation of the Arrangement will require court approval and the approval of (i) at least two-thirds (66⅔%) of the votes cast by the Shareholders, (ii) at least two-thirds (66⅔%) of the votes cast by all the Securityholders, voting together as a single class, and (iii) at least a simple majority of the votes cast by Shareholders, excluding votes from certain shareholders as required under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions, at a special meeting (the "Special Meeting") of the Securityholders. An announcement about the exact timing of the Special Meeting will follow in the near future.
In addition to Securityholder and court approvals, the Arrangement is subject to applicable regulatory approvals and the satisfaction of certain other closing conditions customary in transactions of this nature. Subject to the satisfaction (or waiver) of the conditions precedent, the Arrangement is expected to close in late November, 2023. The Arrangement Agreement includes customary provisions relating to non-solicitation of alternative transactions, subject to customary "fiduciary out" provisions that entitle the Company to consider and accept a superior proposal if not matched by the Purchaser. The Company has also agreed to pay a termination fee to the Purchaser of
Full details of the Arrangement Agreement and the Special Meeting will be included in a management information circular of the Company (the "Management Information Circular") to be filed with applicable regulatory authorities and mailed to Securityholders in accordance with applicable securities laws.
Securityholders and other interested parties are advised to read the materials relating to the proposed Arrangement, including the Arrangement Agreement that will be filed by the Company with securities regulatory authorities in
Upon completion of the Transaction, no securities of the Company will be listed on any public market and the Company will cease to be a reporting issuer under Canadian laws.
This announcement is for informational purposes only and does not constitute a solicitation or a proxy. All amounts are in Canadian currency unless otherwise stated.
HS GovTechTM is an industry leading software as a service company serving the state, provincial and local government market across
Certain information in this news release is considered forward-looking within the meaning of certain securities laws and is subject to important risks, uncertainties and assumptions. This forward-looking information includes, among other things, information with respect to the Company's beliefs, plans, expectations, anticipations, estimates and intentions. The words "may", "could", "should", "would", "suspect", "outlook", "believe", "anticipate", "estimate", "expect", "intend", "plan", "target" and similar words and expressions are used to identify forward-looking information. Forward-looking information in this news release relates to, among other things: anticipated benefits of the Arrangement to Securityholders; the timing and receipt of required Securityholder, court, and regulatory approvals for the Arrangement; the ability of the Company and the Purchaser to satisfy the other conditions to, and to complete, the Arrangement; and the closing of the Arrangement.
These statements reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant uncertainties and contingencies. Many factors, both known and unknown could cause actual results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements or information and the Company has made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation, the satisfaction or waiver of all applicable conditions to closing of the Arrangement including, without limitation, receipt of all necessary Securityholder, court and regulatory approvals or consents and lack of material changes with respect to the Company and its business, all as more particularly set forth in the Arrangement Agreement. In respect of the forward-looking statements and information concerning the anticipated completion of the proposed Arrangement and the anticipated timing for completion of the Arrangement, the Company has made certain assumptions that management believes are reasonable at this time, including assumptions as to the time required to prepare and mail Special Meeting materials. These dates may change for a number of reasons, including unforeseen delays in preparing Special Meeting materials; inability to secure necessary Securityholder, court and regulatory approvals in the time anticipated or the need for additional time to satisfy the other conditions to the completion of the Arrangement. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release concerning these times. In addition, in the event the Arrangement Agreement is terminated in certain circumstances, the Company may be required to pay a termination fee to the Purchaser, the result of which could have a material adverse effect on the Company's financial position and results of operations and its ability to fund growth prospects and current operations.
The forward-looking information in this news release describes the Company's expectations as of the date of this news release. Readers are cautioned against attributing undue certainty to forward-looking statements or information. Although the Company 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 anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements or information, other than as required by applicable law.
Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.
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