BlueTree Wireless Data Inc.,
a leading developer and manufacturer of rugged wireless modems announced
that it has entered into a definitive agreement to be acquired by an affiliate
of Sixnet Holdings, LLC (“Sixnet”), a Delaware limited liability company, in
an all cash transaction pursuant to which BlueTree’s shareholders will receive
C$0.21 per share, representing a 20.7% premium over the 20-day volume weighted
average trading price of the BlueTree common shares on the
TSX Venture Exchange prior to the announcement and a 31% premium over the
closing price of the common shares on Friday, August 24, 2007.
The total value
of the transaction is approximately C$20 million. In addition to the
consideration being paid to the shareholders, BlueTree debentureholders will
receive C$1 for each C$1 principal amount of debentures held by them plus all
accrued and unpaid interest and BlueTree public warrantholders will receive
between C$0.0033 and C$0.0166 for each warrant held by them. The amount
payable to each warrantholder will depend on when the particular series of
warrants was originally issued by BlueTree.
BlueTree’s board formed a special committee of independent directors to
consider the transaction. The committee’s independent financial adviser,
Desjardins Securities Inc., provided an opinion to the board of BlueTree that
the consideration offered in the transaction is fair from a financial point of
view to BlueTree’s minority shareholders. The transaction is to be carried out
by way of a statutory plan of arrangement.
The Company anticipates mailing a
proxy circular relating to the transaction before the end of September to
shareholders of record for a meeting to be held in the last week of October,
2007. The transaction will be subject to the approval of 66 2/3% of the votes
cast by BlueTree shareholders at the meeting and also a simple majority of the
votes cast by shareholders other than Michael Ramsay, Jeffrey Speak, and
Richard Belitzky and those associated with them (the “Insider Group”). The
members of the Insider Group, which control, directly or indirectly,
approximately 42% of the common shares of BlueTree, have entered into lock-up
agreements in support of the proposed transaction.
At the time of completion, the Insider Group will be required to
indirectly invest part of the consideration they are expected to receive from
this proposed transaction, being approximately C$5 million, in the equity of
Sixnet. Sixnet has also agreed to pay the legal fees of the Insider Group in
connection with the proposed series of transaction.
Closing is subject to customary conditions, including regulatory and
court approvals. Upon the occurrence of certain events, including accepting a
superior proposal, BlueTree has agreed that it will pay Sixnet a termination
fee equal to 3% of the transaction value in addition to reimbursing certain
expenses, such expense reimbursement not to exceed C$300,000. Sixnet financing
is not a condition to the proposed transaction.
Michael Ramsay, President of BlueTree said: “Our management team,
together with the team at Sixnet, will continue to focus on providing superior
service and products to our customers worldwide”. Steve Schoenberg, Chief
Executive Officer of Sixnet said, “BlueTree is a well-managed,
well-positioned, innovative company with a significant customer base. We
expect BlueTree, once integrated into Sixnet, to continue its expansion as a
leading developer and manufacturer of rugged wireless modems and look forward
to working with management on the next stage of our combined development.”
The arrangement agreement between BlueTree and Sixnet contains customary
provisions prohibiting BlueTree from soliciting any other acquisition proposal
but allowing termination of the agreement in certain events, including in the
event of an unsolicited acquisition proposal from a third party that in the
exercise of its fiduciary duties the board of directors of BlueTree finds to
be superior to the Sixnet transaction, upon payment of a termination fee to
Sixnet.
The proposed transaction, which has received the unanimous approval of
the board of directors of BlueTree, is expected to close in December, 2007.
