Casa Systems to acquire NetComm Wireless in a recommended transaction
Under the Scheme, NetComm shareholders will receive cash consideration of
The Scheme Consideration values NetComm’s issued equity at approximately
NetComm Directors unanimously recommend the Scheme
Each of NetComm’s Directors consider the Scheme to be in the best interests of NetComm’s shareholders and unanimously recommend that NetComm's shareholders vote in favour of the Scheme, subject to no superior proposal emerging and an independent expert determining that the Scheme is in the best interests of NetComm's shareholders.
Subject to the same qualifications, each NetComm Director intends to vote the NetComm shares held or controlled by them in favour of the proposed Scheme.
NetComm’s Directors believe this is a compelling offer for NetComm shareholders for the following reasons:
• Significant premium: The Scheme Consideration of
- 52.8% premium to the closing price of
A$0.720per share on 20 February 2019;
- 49.8% premium to the 1-month volume weighted average price of
A$0.7341 per share (VWAP);
- 40.9% premium to the VWAP of
A$0.7812 per share since NetComm announced its FY18 results on 27 August 2018.
• Certainty of value: the 100% cash consideration provides NetComm shareholders with certainty of value and the opportunity to realise their investment in full for cash.
• Limited conditionality: The Scheme is not subject to a finance condition and is subject only to conditions customary for transactions of this type, including approval from the
NetComm Chairman, Justin Milne, said: “The Scheme is an attractive, all-cash transaction. The NetComm Board has unanimously concluded that the Scheme represents a compelling outcome for our shareholders, customers, suppliers and staff.”
“The price is a very tangible measure of the value and quality of NetComm’s telecommunications technology solutions, our position in the global telecommunications industry, and our recent strong performance developing unique 4G and 5G solutions, winning and retaining key contracts. At a significant premium to the current trading price, Casa Systems’ offer provides NetComm shareholders with certainty of value and the opportunity to realise their investment in full for cash.
“NetComm’s customers will benefit from the resultant increase in scale to deploy unique telecommunications technology solutions, as well as a broader product suite and service capability.
“In addition, the Scheme is great news for NetComm staff. We believe there will be excellent opportunities for our engineers to be engaged with Casa Systems’ pioneering advanced ultra-broadband 5G solutions for mobile, cable, fixed and converged service providers. Listed on NASDAQ, Casa Systems has revenue of approximately
Casa Systems Chairman and CEO, Jerry Guo, said: “NetComm represents a strong strategic fit for Casa Systems. NetComm is an innovative and agile organisation that has led the global development of fixed wireless and distribution point broadband solutions. We believe that this transaction will create a global leader in the rapidly growing broadband enablement space for service providers across all access technologies. With complementary product portfolios, the combination of Casa Systems and NetComm strengthens our ability to meet the growing demand for increased bandwidth by communications service providers around the world. Moreover, it positions the combined company with a broad, highly competitive product portfolio for new 4G architectures and 5G wireless.
“We see substantial benefits to Casa Systems from this acquisition. It will diversify our revenues both geographically and by product channel. It expands Casa Systems’ customer reach with the addition of several new Tier 1 Global Communications Services Provider customers. It adds fixed wireless products to our portfolio, enabling us to address the large 5G fixed wireless access market. And, it has the potential to deliver meaningful benefits through the merger of two complementary, culturally aligned organisations, with immediate EPS accretion for Casa Systems shareholders.”
Details of the Scheme Implementation Deed
The Scheme Implementation Deed entered into between Casa Systems and NetComm (SID) contains customary terms and conditions on which NetComm and Casa Systems will implement the Scheme including FIRB approval, approval of NetComm shareholders, court approval, no material adverse change and no prescribed occurrences or material breach of warranty in relation to Casa Systems and NetComm. In addition, the SID contains certain exclusivity provisions commencing on
Full details of the conditions to the Scheme and other agreed terms are set out in the SID, a copy of which is attached to this announcement.
Indicative timetable and next steps
A scheme booklet containing information relating to the Scheme, reasons for the NetComm directors’ unanimous recommendation, an Independent Expert’s Report and details of the Scheme meeting is expected to be sent to NetComm shareholders in
Shareholders will then have the opportunity to vote on the Scheme at a court convened shareholder meeting, expected to be held in
Subject to shareholder approval being obtained by the requisite majorities and the other conditions of the Scheme being satisfied, the Scheme is expected to be implemented in
Set out below is an indicative timetable for the Scheme.
|First court hearing||Early May 2019|
|Dispatch of Scheme booklet to NetComm shareholders||Mid May 2019|
|Scheme meeting||Early June 2019|
|Second court hearing||Early June 2019|
|Effective date||Early June 2019|
|Record date||Mid June 2019|
|Implementation date||Late June 2019|
NetComm shareholders do not need to take any action at this point in time.
NetComm CEO Change
As separately announced today, Ken Sheridan has stepped aside from the role of Managing Director & CEO of NetComm with immediate effect due to family health issues, but will continue as an Executive Director on NetComm’s Board. Having been responsible for NetComm’s strategic technical direction, product innovation, and design for nine years, and being well known to NetComm’s shareholders and customers, Chief Technology Officer Steve Collins has been appointed Interim CEO.
NetComm is being advised by
Casa Systems is being advised by
For more information
Ronn Bechler, Market Eye
P: +61 400 009 774
P: +61 424 297 301
P: +61 403 789 096
P: +1 212.871.3927
P: +1 212.331.8417
For over 35 years,
For more information visit: www.NetCommwireless.com
About Casa Systems
Casa Systems will host a conference call today,
For more information visit: www.casa-systems.com
Cautionary Statement Regarding Forward-Looking Statements
This communication contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. You can generally identify forward-looking statements by the use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “explore,” “evaluate,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” or “will,” or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the control of Casa Systems and NetComm. Statements in this communication regarding Casa Systems, NetComm and the combined company that are forward-looking, including projections as to the anticipated benefits of the proposed transaction, the impact of the proposed transaction on Casa Systems’s and NetComm’s business and future financial and operating results, the amount and timing of synergies from the proposed transaction, and the timeline and closing date for the proposed transaction, are based on management’s estimates and assumptions, and are subject to significant uncertainties and other factors, many of which are beyond the control of Casa Systems and NetComm. These factors include, among other things, market factors and economic conditions, and the combined company’s ability to execute successfully its strategic plans, including its business development strategy. Additional information concerning these risks, uncertainties and assumptions can be found in Casa Systems’s filings with the
1 VWAP based on cumulative trading volume from
2 VWAP based on cumulative trading volume from
Source: Casa Systems, Inc.