LONDON, UK: ProPhotonix Limited, a designer and manufacturer of LED illumination systems and laser diode modules with operations in Ireland and the United Kingdom, has reached an agreement, wherein Exaktera will ProPhotonix for an aggregate consideration of approximately $11.6 million.
Exaktera was founded by Union Park Capital to act as a holding company for a group of companies Union Park is building in the high-precision OEM market.
The ProPhotonix Board of Directors unanimously approved the Merger Agreement and has recommended that the Stockholders vote in favour of adoption of the Merger Agreement. As described in greater detail below, this transaction will require the approval of Stockholders at the Stockholders Meeting of the Company to be held on 15 December 2021 as described below.
At the same time, and conditional upon the successful approval of the Merger Agreement, the Company is also seeking Stockholder approval for the proposed cancellation of the Company’s common stock from trading on AIM, a market of the London Stock Exchange. Further details of which, including a timetable of principal events, are set out below.
Certain capitalized terms used in this announcement have the meanings specified in the Appendix affixed hereto.
Key terms of the Acquisition
· Under the terms of the Merger Agreement, Stockholders will be entitled to receive $0.117 (which equates to £0.087 as of the date of the Merger Agreement) for each share of Company Common Stock.
· The Acquisition Price is fixed and will be paid in US Dollars.
· The Acquisition Price values the entire issued and to be issued share capital of the Company at approximately $11.6 million (which equates to £8.7 million as of the date of the Merger Agreement) and represents a premium of:
1. approximately 54.6% over the thirty trading day average closing price of the Company’s Common Stock on the OTC market of $0.076 ending on 9 November 2021; and
2. approximately 53.8% over the thirty trading day average closing price of the Company’s Common Stock on AIM of 0.056 pence ending on 9 November 2021.
· As at the date of this announcement, ProPhotonix has 93,300,402 shares of Company Common Stock outstanding and admitted to trading on AIM.
· Tim Losik, the Company’s CEO, has agreed to personally indemnify the acquiror for damages up to $341,362 resulting from the potential breach of certain representations and warranties by the Company in the merger agreement.
· Merger Sub is a newly incorporated company formed for the purpose of implementing the Acquisition. Merger Sub has not carried on any business prior to the date of the Merger Agreement and has not prepared any historical financial accounts. The Acquisition is proposed as a merger of Merger Sub with and into the Company, in accordance with the Delaware General Corporation Law, with the Company being the surviving corporation.
The Acquisition is not governed by the UK City Code on Takeovers and Mergers by virtue of ProPhotonix’s status as a corporation incorporated in Delaware with its registered office located outside the UK. Accordingly, the Acquisition is not subject to the jurisdiction of, nor is it being regulated by, the Panel on Takeovers and Mergers in the UK and Stockholders will not be afforded the protections of the Takeover Code.