Vector Capital, a leading global technology investment firm, has made an offer that is clearly superior for Technicolor and its shareholders to the transaction with JP Morgan Chase & Co. and One Equity Partners (the "JPMorgan Transaction").
We have noted that the Board of Technicolor recommends that shareholders vote for the draft resolutions relating to the JPMorgan Transaction. It is our belief that the board of directors expressed its recommendation taking into account its contractual obligations under the contracts signed on May 2, 2012 with Jesper Cooperatief U.A.
Vector Capital believes it is important to highlight the differences between the draft resolutions submitted by Vector Capital and JP Morgan because both will be presented to Technicolor shareholders at the upcoming June 20, 2012 shareholders´ meeting. Notably, Vector Capital´s offer would provide superior economic and strategic benefits to Technicolor and its shareholders, and would give the Company substantially more proceeds to strengthen the balance sheet and repay debt, and serve to assist the Company with the execution of its "˜Amplify 2015´ strategy:
- Petalite (the investment vehicle owned by Vector Capital) would subscribe to a reserved capital increase at a price of €1.90 per share, a 19% premium compared to the JPMorgan Transaction of €1.60 per share.
- Vector Capital´s proposal represents a weighted average price of €1.71 to €1.73 per share issued, an approximately 8% premium to the JPMorgan Transaction of €1.59 per share issued, assuming 0 to 100% shareholder subscription to the rights offering.
- Vector Capital´s proposal includes a smaller reserved capital increase and a larger rights offering, which lowers the dilution to Technicolor´s current shareholders by 28.3%.
- Vector Capital´s proposal allows existing shareholders to subscribe to more than twice the number of shares than the JP Morgan Transaction. Vector Capital has designed the balance between the reserved capital increase and rights offering specifically to reduce the dilution of existing shareholders.
- With total proceeds of up to €186.4 million, Vector Capital´s offer would result in €28.7 million more proceeds to Technicolor (18.2% higher) than the JPMorgan Transaction.
- Vector Capital is a pure technology investment firm with 15 years of experience investing in the technology and digital media markets. Vector Capital has a highly focused investment strategy that emphasizes technology companies with a high degree of intellectual property that are in a state of transformation. Since inception in 1997, Vector Capital has made more than 35 investments in public and private companies with an aggregate value of more than $2.5 billion, across sectors including digital media, infrastructure software, and internet services.
- Vector Capital would be a committed and stable long-term partner. Over the past months, Vector Capital has had extensive discussions with Technicolor management and it is convinced it can assist Technicolor in the execution of its strategy. After strengthening the Company´s balance sheet and helping it pay down debt, Vector Capital would be fully supportive of Technicolor´s management in the implementation of the "˜Amplify 2015´ strategic roadmap and the Company´s focus on technology leadership.
Vector Capital´s offer is a clear and substantial improvement both for Technicolor and its shareholders. It would enable the Company to emerge intact, stronger and much better positioned in the global technology marketplace.
About Vector Capital
Vector Capital is a leading global private equity firm located in San Francisco specializing in the technology sector. Founded in 1997, Vector Capital manages over $2 billion in equity capital from a variety of investors, including the world´s most respected university endowments, foundations, financial institutions, and family offices. Vector Capital has a highly focused investment strategy that emphasizes technology companies with a high degree of intellectual property that are in a state of transformation. Since inception, Vector Capital has made more than 35 investments in public and private companies with an aggregate value of more than $2.5 billion, across sectors including digital media, infrastructure software, and internet services.
