VIAVI's Binding Proposal represents a 33 ⅓% or US$2.00 per share premium to the current Going
Private Transaction
SCOTTSDALE, Ariz., July 20, 2021 /CNW/ -- Viavi Solutions
Inc. (VIAVI) (NASDAQ: VIAV) today announced an increased
binding proposal (the "Proposal") to acquire all of the outstanding
subordinate voting shares and multiple voting shares of EXFO Inc.
(TSX: EXF) (NASDAQ: EXFO) ("EXFO") from US$7.50 to US$8.00
in cash per share. VIAVI has submitted a binding proposal to the
EXFO board of directors, including a definitive form of Arrangement
Agreement based substantially on the form agreed in connection with
the proposed going private transaction between EXFO and its
chairman and majority shareholder, Germain
Lamonde (the "Going Private Transaction"). The
increased binding proposal from VIAVI reflects EXFO's recently
announced fiscal third quarter 2021 financial results in which
bookings increased 47.2% year-on-year to US$87 million with a book-to-bill ratio at
1.20. EXFO's business strength reflects both a macroeconomic
recovery and secular industry growth demand driven by 5G wireless
and fiber network deployment. EXFO's strong results and
future prospects further underpin the inadequate US$6.00 consideration of the Going Private
Transaction.
Increased Binding Proposal from VIAVI Provides Greater Value
for EXFO Shareholders
VIAVI's Proposal now values EXFO at
approximately US$459 million on an
undiluted basis and represents a significant premium of:
- 116% to the NASDAQ closing price on June
4, 2021, the trading day before the announcement of the
Going Private Transaction;
- 33 ⅓% to the US$6.00
consideration offer under the Going Private Transaction; and
- 6.7% to VIAVI's previous already-superior proposal to acquire
EXFO.
Additionally, VIAVI's Proposal is higher than the US$5.75 to US$7.50
formal valuation range of EXFO's subordinate voting shares prepared
by TD Securities Inc., acting as the EXFO Special Committee's own
valuator in connection with the Going Private Transaction.
VIAVI's enhanced Proposal allows all EXFO shareholders to
recognize significant value for their shares, including Mr.
Lamonde, who would receive the same superior premium as other
shareholders, and given his sizeable interest, would benefit
significantly from VIAVI's Proposal. In light of the significant
value being provided to shareholders under the Proposal, we would
expect the EXFO Special Committee, consistent with their fiduciary
duties to all shareholders, to immediately engage with us and Mr.
Lamonde and make every effort to persuade Mr. Lamonde to support
VIAVI's superior transaction.
VIAVI stands ready to engage with the EXFO Special Committee and
Mr. Lamonde in order to finalize a definitive arrangement agreement
to implement a transaction that is in the best interests of all
EXFO shareholders.
Clear Strategic Merits for Combining VIAVI and
EXFO
There are clear strategic merits for combining VIAVI
and EXFO to build the leader in communications test and measurement
for the next decade. The strength of the combined teams and
technology, with significantly greater scale and financial
resources, would enable strong investment in growth while achieving
greater operating leverage than either company could do alone.
VIAVI values the expertise, skills and experience of the EXFO key
employee talent and believes their retention and continued
commitment is critical to the success of the combination. VIAVI
intends to continue EXFO's brand and legacy, recognizing EXFO's
strong reputation built on years of quality product development,
engineering excellence and customer service, and continue EXFO's
presence and operations in Quebec
to complement and expand upon VIAVI's long-standing engineering and
product development teams in Quebec and Ottawa.
Minimal Customary Conditions
VIAVI's board of
directors has unanimously approved the Proposal and no VIAVI
shareholder vote will be required for the transaction. In
addition, the transaction will not be subject to any financing
condition.
Advisors
Fried Frank Harris
Shriver & Jacobson LLP and McCarthy Tétrault LLP are
acting as U.S. and Canadian legal counsel to VIAVI, respectively.
Kingsdale Advisors is acting strategic shareholder and
communications advisor to VIAVI.
About VIAVI
VIAVI (NASDAQ: VIAV) is a global provider
of network test, monitoring and assurance solutions for
communications service providers, enterprises, network equipment
manufacturers, government and avionics. We help these customers
harness the power of instruments, automation, intelligence and
virtualization to Command the network. VIAVI is
also a leader in light management solutions for 3D sensing,
anti-counterfeiting, consumer electronics, industrial, automotive,
and defense applications. Learn more about VIAVI at
www.viavisolutions.com. Follow us on VIAVI Perspectives, LinkedIn,
Twitter, YouTube and Facebook.
Forward-Looking Statements
This press release contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934, including statements and expectations regarding the
Proposal, the strategic merits of a transaction between EXFO and
VIAVI, VIAVI's expectations regarding growth, scale, financial
resources and operating leverage, and VIAVI's plans regarding
EXFO's brand, legacy and operations. These forward-looking
statements involve risks and uncertainties that could cause actual
results to differ materially from those projected. For more
information on these risks, please refer to the "Risk Factors"
section included in the Company's most recent Annual Report on Form
10-K filed with the Securities and Exchange Commission on
August 24, 2020 and our
Quarterly Reports on Form 10-Q filed on November 10, 2020, February 9, 2021 and May
7, 2021. The forward-looking statements contained in
this press release are made as of the date hereof and the Company
assumes no obligation to update such statements.
Additional Information
The information contained in
this press release does not, and is not meant to, constitute a
solicitation of a proxy within the meaning of applicable Canadian
securities laws. It also does not constitute an offer to
purchase or a solicitation of an offer to sell shares of EXFO.
Notwithstanding the foregoing, VIAVI is voluntarily providing
the disclosure required under Section 9.2(4) of National Instrument
51-102 – Continuous Disclosure Obligations applicable to
public broadcast solicitations.
Any solicitation made by VIAVI will be made by it (directly or
on its behalf) and not by or on behalf of management of EXFO. All
costs incurred for any such solicitation will be borne by VIAVI.
VIAVI has entered into an agreement with Kingsdale Advisors
pursuant to which Kingsdale Advisors has agreed to provide certain
consulting and related services. VIAVI may solicit proxies in
reliance upon the public broadcast exemption to the solicitation
requirements under applicable Canadian corporate and securities
laws, including through press releases, speeches or publications,
and by any other manner permitted under applicable Canadian
corporate and securities laws. If VIAVI commences any solicitation
of proxies, proxies may be revoked by an instrument in writing by a
shareholder giving the proxy or by its duly authorized officer or
attorney, or in any other manner permitted by law. Neither VIAVI
nor, to its knowledge, any of its associates or affiliates, has any
material interest, direct or indirect, by way of beneficial
ownership of securities or otherwise, (i) in any matter proposed to
be acted upon in connection with the Going Private Transaction or
(ii) in any transaction since the beginning of EXFO's most recently
completed financial year or in or in any proposed transaction which
has materially affected or would materially affect EXFO or any of
its subsidiaries. Based upon publicly available information, EXFO's
head office is located at 400 Godin Avenue, Quebec, Quebec, G1M 2K2, Canada.
Inquiries:
Investors
Bill Ong
+1 (408) 404-4512
bill.ong@viavisolutions.com
Media (regarding the Proposal)
Hyunjoo Kim
+1 (416) 899-6463
hkim@kingsdaleadvisors.com
Media (all other inquiries)
Amit Malhotra
+1 (202) 341-8624
amit.malhotra@viavisolutions.com
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SOURCE VIAVI Financials