Constellation is a large public company focused on, through its operating groups including the Harris operating group, investing in, and managing, software companies with mission critical products and a strong industry presence and has been operating in a variety of vertical markets for over 25 years.
With strong financial backing,
"Constellation's buy and hold investment strategy and commitment to providing customers software for life makes Harris a perfect permanent owner of
Under the terms of the Arrangement Agreement, each
"The acquisition by Harris, a wholly owned subsidiary of Constellation (TSX:CSU) will provide the financial strength and operational support required as
The Board, after receiving financial and legal advice, and following receipt of the Fairness Opinion and the unanimous recommendation of the Special Committee, has unanimously determined that the Transaction is in the best interests of
The Transaction was approved by the Board based on consideration of the recommendation of the Special Committee,
In recommending the Transaction, the Special Committee and the Board considered and evaluated a number of factors, including those listed below:
- Review of Strategic Alternatives Process. Prior to recommending the transaction, the Special Committee considered the extensive nature of
NexJ's strategic alternatives process (the "Strategic Alternatives Process") to identify a strategic partner or purchaser for the Company which, over the period of the process, did not secure a transaction on terms considered to provide greater value with an appropriate degree of risk than the terms proposed byNHC , and in particular, (i) the public disclosure of the Company's intent to undertake the Strategic Alternatives Process inSeptember 2019 , and the period of time over which interested parties could assess their interest in considering a potential transaction with the Company; (ii) the volatility in the capital markets which negatively impacted the process throughout 2020 and subsequently in early 2022, (iii) the extent of the efforts made by the Company and its financial advisors to identify and engage with parties having interest in a potential transaction with the Company, and, (iv) the assessment of potential transactions and their associated financial risk resulting from discussions and negotiations with parties, other thanNHC , that did express interest but did not result in a transaction. - No Brokerage Fees or Commissions. The Transaction will allow each NexJ Shareholder to dispose of their common shares without incurring brokerage fees or commissions.
- Company Performance and Financial Condition. The Special Committee recognized that the market dynamics and commercial challenges facing the company could not be ameliorated without additional capital to improve its competitiveness. The Special Committee considered the low likelihood of obtaining any additional equity financing for the Company, and the uncertainty and cost that would be associated with obtaining debt financing. The Special Committee has therefore concluded that without additional capital, the risk to shareholders would likely increase in the future.
- Fairness Opinion. The Special Committee considered and relied on the Fairness Opinion and its conclusion that, as of the date thereof, and subject to the assumptions, limitations and qualifications contained therein, the consideration to be received by the NexJ Shareholders pursuant to the Transaction is fair from a financial point of view to the NexJ Shareholders.
- Shareholder and Court Approval. The Transaction must be approved by the affirmative vote of at least 66⅔% of the votes cast by NexJ Shareholders at a special meeting to be held to consider and approve the Transaction, as well as by the
Ontario court. - Arm's Length Negotiations. The Transaction and the Arrangement Agreement are the result of a comprehensive negotiation process that was undertaken at arm's length with the oversight and participation of the Special Committee and the Board and the participation of legal counsel, which resulted in an agreement with terms and conditions that are reasonable in the judgment of the Special Committee and the Board.
- Ability to Respond to Superior Proposals. The terms and conditions of the Arrangement Agreement do not prevent a third party from making an unsolicited Acquisition Proposal (as defined in the Arrangement Agreement) and, subject to compliance with the terms of the Arrangement Agreement, the Board is not precluded from considering and responding to an unsolicited Acquisition Proposal that constitutes, or could reasonably be expected to constitute, a Superior Proposal at any time prior to obtaining the approval by NexJ Shareholders of the Transaction.
- Interim Period Restrictions. The restrictions on the Company's business until the Transaction is completed or the Arrangement Agreement is terminated are reasonable and are not expected to impair or materially affect the Company's business during such period.
- Deal Certainty. The Special Committee considered the likelihood that the Transaction would be completed in light of the customary nature of the conditions to closing under the Arrangement Agreement, and the fact that the Transaction is not subject to a financing condition.
In addition, directors, executive officers and other shareholders of
The Transaction will be implemented by way of a statutory plan of arrangement under the Canada Business Corporations Act and will require the approval of 66 2/3% of the votes cast by NexJ Shareholders at a special meeting of NexJ Shareholders to be called to approve the Transaction (the "Special Meeting"). Pursuant to the "minority approval" requirements of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions, the Transaction must also be approved by a simple majority of the votes validly cast by the NexJ Shareholders present in person or by proxy at the Meeting, excluding the votes of
The completion of the Transaction will also be subject to obtaining required court and other approvals and satisfaction of closing conditions customary for a transaction of this nature. The Arrangement Agreement includes customary deal-protection provisions.
It is anticipated that the Special Meeting will be held in
A copy of the written Fairness Opinion, and a description of the various factors considered by the Board in its determination to approve the Transaction, as well as other relevant background information, will be included in the management information circular to be sent to
Harris acquires vertical market software businesses, manages them using industry best practices, and builds them for the future. Through acquisitions, Harris has grown extensively from its roots in the utilities, local government, education, and healthcare sectors to operate over 180 businesses globally across more than twenty industries. Harris is an operating group of Constellation Software Inc. (TSX: CSU), one of
Based in
This press release includes forward-looking statements regarding
Actual results or events could differ materially from those contemplated in forward-looking statements as a result of the following: (i) the ability to secure the required shareholder or court approvals; (ii) the occurrence of a "Material Adverse Effect" (as defined in the Arrangement Agreement) or the failure to satisfy any other closing condition in favour of
The risks and uncertainties that may affect forward-looking statements include, but are not limited to: (i) risks relating to the receipt of all requisite approvals for the Transaction; (ii) fluctuation in our quarterly operating results; (iii) our dependence on key personnel and our compensation structure; (iv) risks associated with managing large and complex software implementation projects; (v) uncertainties and assumptions in our sales forecasts, including the extent to which sales proposals are converted into sales; (vi) risks associated with our ability to design, develop, test, market, license and support our software products on a timely basis; (vii) market acceptance of our products and services; (viii) commercial success of products resulting from our investment in research and development; (ix) our success in expanding sales into new international markets; * competition in our industry; (xi) failure to protect our intellectual property or infringement of intellectual property rights of third parties; (xi) reliance upon a limited number of third-party software products to develop our products; (xiii) defects or disruptions in our products and services; (xiv) currency exchange rate fluctuations; (xv) lengthy sales cycles for our software; (xvi) general economic conditions; (xvii) failure to manage our growth successfully; (xviii) breach of our security measures and unauthorized access to data; and (xix) litigation, including litigation relating to the proposed Transaction, and commercial, product liability, employment, class action and other litigation and claims.
For additional information with respect to risks and other factors which could occur, see the Company's most recently filed Annual Information Form for the year ended
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