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Dialogic Signs Merger Agreement with Novacap TMT [Professional Services Close - Up](Professional Services Close - Up Via Acquire Media NewsEdge) Dialogic reported that it has entered into a definitive merger agreement with entities affiliated with Novacap TMT IV, L.P., an investment fund focused on technology, media and telecommunications and part of the Novacap group, a Canadian private equity firm. According to a release from the Company, the Dialogic Board of Directors, acting on the unanimous recommendation of a special committee of independent directors, approved a merger agreement under which Novacap will acquire Dialogic, subject to a number of conditions set out in the merger agreement. Under the terms of the merger agreement, an affiliate of Novacap will commence a tender offer for all outstanding shares of Dialogic common stock at an offer price of $0.15 per share within 10 business days. The total cash consideration of $35.3 million will be split among Dialogic stockholders (including certain funds managed by Tennenbaum Capital Partners, LLC (the "Tennenbaum Funds")), who will receive $0.15 in cash for each share of Dialogic common stock they hold, and the Tennenbaum Funds which will receive the balance of the purchase price (approximately $34.2 million). The Tennenbaum Funds will receive that in exchange for approximately $78.3 million of term loan debt which will be canceled and eliminated from Dialogic's capital structure, and $8.75 million of term loan debt which will be converted into Dialogic common stock prior to the closing of the tender offer pursuant to an exchange agreement, at a conversion price equal to the $0.15 offer price in the tender offer, and will subsequently be sold by the Tennenbaum Funds into the tender offer. Following the closing of the tender offer, the affiliate of Novacap will own more than 90 percent of Dialogic's common stock and such affiliate is expected to merge with and into Dialogic without further action required from Dialogic's stockholders. Stockholders who do not tender their shares in the tender offer (and do not exercise appraisal rights in accordance with Delaware law) will receive consideration per share equal to the offer price as a result of the merger. "After an extensive review of Dialogic's strategic alternatives with management and our financial advisors, a Special Committee of independent directors has determined that a merger with Novacap provides the best value for Dialogic's stockholders," said Pat Jones, Chairman of Dialogic's Board of Directors and a member of the Special Committee. Dialogic's Board of Directors has approved and declared advisable the merger agreement, the tender offer and related transaction documents, determined that the transaction is fair to and in the best interests of Dialogic's stockholders, and resolved to recommend acceptance of the tender offer by stockholders and, if required, adoption of the merger agreement and approval of the merger by the stockholders. "We welcome this partnership with Novacap and are excited by our combined ability to unlock Dialogic's full potential for our customers and employees," said Kevin P. Cook, president and CEO, Dialogic. "We have established leadership in high-value segments such as rich media processing, including WebRTC, and intelligent call control, including VOIP and mobile signaling and switching. These focused investments, combined with a greatly improved operating structure, better support our customers in accelerating their shift towards Network Functions Virtualization (NFV) and Cloud- based business models. Dialogic is truly poised to help our customers make the most of their mission-critical network and application investments." "As a firm focused on investing in high potential technology companies, we see Dialogic as being well positioned to capitalize on the key shifts impacting their industry. Dialogic's long term strategic and deployment plan is completely aligned with the interests of their customers," said Stephane Tremblay, senior partner of Novacap. "We are confident in Dialogic's expertise in multi-protocol networking and ability to deploy virtualized software solutions as an important competitive advantage." The transaction is expected to be completed during the fourth quarter of 2014, subject to the completion of the tender offer and other closing conditions. There is no financing condition to the obligations of Novacap to consummate the transaction. More information and complete details: www.dialogic.com www.novacap.ca ((Comments on this story may be sent to [email protected])) (c) 2014 ProQuest Information and Learning Company; All Rights Reserved. |