On January 17, 2017, Apivio (TSX:APV.V) received an all cash takeover offer from Korean manufacturer Nuri Telecom of C$0.40 per share. This would value the company at a market cap of C$21.1 million, which is only 0.38 times estimated 2016 sales of C$56 million. Analysts believe this is a very low price and fair value is closer to C$1.00 per share in line with its peers.
Nuri Telecom is a profitable C$128 million ($90 million US dollars) company that had $50.2 million in sales in 2015. It describes itself as a leading provider of Smart Grid and energy management systems and solutions, enabling advanced metering and Smart Grid applications over wireless and electrical networks.
Nuri has put its offer including the logic behind the valuation and the reasons shareholders and management should accept the offer in this press release. In addition, Nuri has entered into lock-up agreements with various shareholders of Apivio, including the founder and former CEO of Moimstone, and former board member of Apivio, C.W. Lee. These lock-up agreements represent approximately 10.69% of the shares outstanding.
Nuri has started proxy solicitation of the offer and has filed the offer and take-over bid circular and related documents on SEDAR. In addition to a shareholder mailing, copies of the offer documents can be retrieved at www.ApivioOffer.com or under Apivio's profile at www.sedar.com. The deadline for accepting the offer is 11:59 PM (Toronto time) on May 2, 2017.
The company has advised shareholders not to make any decision until management has had time to evaluate alternative avenues for their consideration. Its board of directors will review and evaluate the offer and solicit potential alternative transactions that may provide greater value. Apivio has established a special committee of independent directors to evaluate the Nuri offer and manage the value maximization process. Further information is forthcoming and will be filed on SEDAR. The company is using the law firm of Blake, Cassels & Graydon, LLP, and Haywood Securities Inc. as its investment banker.
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