SafeNet to Be Acquired by Private Equity Firm Vector Capital for $634 Million
March 05 2007 - 2:59PM
Business Wire
SafeNet, Inc. (NASDAQ:SFNT), setting the standard for information
security, today announced that it has entered into a definitive
agreement to be acquired by an investor group led by Vector Capital
in a transaction valued at approximately $634 million. The $28.75
per share price represents a premium of 12% over the SafeNet
average closing share price during the 30 trading days ended March
2, 2007 and a 57% premium over its closing stock price on October
2, 2006, the last date before the Company commenced intensive
efforts to explore its strategic alternatives. Under the terms of
the agreement, a subsidiary of Vector Capital (Stealth Acquisition
Corp.) will commence a tender offer to acquire all of the
outstanding shares of SafeNet common stock for $28.75 per share in
cash. The offer is expected to commence on or before March 12,
2007, and will expire at midnight on the 20th business day
following and including the commencement date, unless extended in
accordance with the terms of the merger agreement and the
applicable rules and regulations of the Securities and Exchange
Commission (�SEC�). The Board of Directors of SafeNet unanimously
approved the definitive agreement and recommends that shareholders
tender their shares into the tender offer. Members of SafeNet�s
Board have agreed to tender their shares. Walter Straub, SafeNet�s
Chairman and CEO, said, �Over the past five months, our Board of
Directors engaged in an extremely thorough review of all strategic
options available to the Company, including a broad solicitation
process that resulted in significant competitive interest in our
Company. Based on this comprehensive process, the Board determined
that being acquired by Vector Capital and its partners represents a
compelling opportunity that is in the best interest of our
shareholders, customers and employees.� �In Vector, we have
identified a partner that is committed to assisting the Company to
fully realize its opportunities while we continue to address our
issues and build momentum in our business,� continued Straub. Chris
Nicholson, a Partner at Vector, said, �SafeNet�s full suite of
leading government and industry security solutions uniquely
position the Company with its strong customer base, and we look
forward to working with SafeNet�s talented employees and management
team to build lasting value for the Company and its customers.�
David Fishman, a Principal at Vector commented, �The challenges of
being a public company today can sometimes inhibit growth in
companies like SafeNet. We believe SafeNet will significantly
benefit from being a private company, and will be in a better
position to help achieve its goal of providing leading security
solutions to both its Government and Commercial customers.� The
tender offer is conditioned upon, among other things, approximately
78% of SafeNet�s shares being tendered in the offer based on the
current shares and options outstanding. If the Company becomes
current in its SEC filings, the minimum tender condition will be
reduced to a majority of the fully diluted eligible shares. The
transaction is not subject to any financing condition. The
transaction will be financed through a combination of equity and
debt, with the debt financing committed by Deutsche Bank and
Citigroup Global Markets and the equity committed by Vector and
certain of its partners. Provided that the minimum tender condition
is met, the transaction is expected to be completed during the
second quarter of 2007, subject to customary closing conditions and
regulatory approvals. There can be no assurance that the
transaction will be approved or consummated. Merrill Lynch is
acting as financial advisor to SafeNet, Inc., and Wachtell,�Lipton,
Rosen & Katz is acting as the Company�s legal advisor.�Credit
Suisse also was retained to provide certain financial advisory
services to the Board of Directors of SafeNet. O'Melveny and Myers
is acting as legal advisor to Vector Capital. Deutsche Bank served
as lead financial advisor and co-lead arranger of the debt
financing and Citigroup Global Markets Inc. served as co-advisor
and co-lead arranger. About SafeNet, Inc. SafeNet is a global
leader in information security. Founded more than 20 years ago, the
company provides complete security utilizing its encryption
technologies to protect communications, intellectual property and
digital identities, and offers a full spectrum of products
including hardware, software, and chips. UBS, Nokia, Fujitsu,
Hitachi, Bank of America, Adobe, Cisco Systems, Microsoft, Samsung,
Texas Instruments, the U.S. Departments of Defense and Homeland
Security, the U.S. Internal Revenue Service and scores of other
customers entrust their security needs to SafeNet. For more
information, visit www.safenet-inc.com. About Vector Capital Vector
Capital is a leading private equity firm specializing in buyouts,
spinouts and recapitalizations of established technology
businesses. Vector identifies and pursues these complex investments
in both the private and public markets. Vector actively partners
with management teams to devise and execute new financial and
business strategies that materially improve the competitive
standing of these businesses and enhance their value for employees,
customers and shareholders. Among Vector�s notable investments are
Savi Technology, LANDesk Software, Corel Corporation (Nasdaq:CREL),
Register.com, and Watchguard Technologies. For more information,
visit www.vectorcapital.com. Forward Looking Statements. Statements
made in this release, our website and in our other public filings
and releases, which are not historical facts contain
�forward-looking� statements (as defined in the Private Securities
Litigation Reform Act of 1995) that involve risks and uncertainties
and are subject to change at any time. These forward-looking
statements may include, but are not limited to, statements
containing words such as �anticipate,� �contemplate,� �believe,�
�plan,� �estimate,� �expect,� �intend,� �may,� �target,� �look
forward to� and similar expressions. Factors that could cause
actual results to differ materially include, but are not limited
to, the following: costs, litigation, an economic downturn or
changes in the laws affecting our business in those markets in
which we operate, other economic, business, competitive, and/or
regulatory factors affecting our business including those set forth
in our public filings, costs related to the proposed merger and
tender offer, the risk of failing to obtain any required
stockholder approvals or meet minimum tendering conditions or other
conditions, the risk that the transaction will not close or that
such closing will be delayed, and the risk that our business will
suffer due to uncertainty. There can be no assurance that the
tender offer and second-step merger or any other transaction will
be consummated, or if consummated, that it will increase
shareholder value. The forward-looking statements involve known and
unknown risks, uncertainties and other factors that are, in some
cases, beyond our control. We caution investors that any
forward-looking statements made by us are not guarantees of future
performance or events. We disclaim any obligation to update any
such factors or to announce publicly the results of any revisions
to any of the forward-looking statements to reflect future events
or developments, except to the extent required by law. Additional
Information and Where to Find It. In connection with the tender
offer, SafeNet expects to file a solicitation/recommendation
statement on Schedule 14D-9 with the Securities and Exchange
Commission (the �SEC�). In connection with the proposed merger,
SafeNet expects to file a proxy statement with the SEC, if required
by law. Investors and security holders are strongly advised to read
these documents when they become available because they will
contain important information about the tender offer and the
proposed merger. Free copies of materials which filed by SafeNet
will be available at the SEC�s web site at www.sec.gov, or at the
SafeNet web site at www.safenet-inc.com or www.safenetinvestor.com
and will also be available, without charge, by directing requests
to SafeNet, Investor Relations: Gregg Lampf, 4690 Millennium Drive
Belcamp, Maryland 21017, 443-327-1532. SafeNet and its directors,
executive officers and other members of its management and
employees may be deemed participants in the solicitation of tenders
or proxies from its shareholders. Information concerning the
interests of SafeNet�s participants in the solicitation is set
forth in SafeNet�s proxy statements and other public filings with
the SEC, and will be set forth in proxy statements relating to any
merger, if one is required to be filed, and in the
solicitation/recommendation statements on Schedule 14D-9 when they
become available. This document is for informational purposes only
and is not an offer to buy or the solicitation of an offer to sell
any securities. The solicitation and the offer to buy shares of
SafeNet�s common stock will only be made pursuant to an offer to
purchase and related materials that Stealth Acquisition Corp.
intends to file with the Securities and Exchange Commission. Once
filed, SafeNet stockholders should read these materials carefully
prior to making any decisions with respect to the offer because
they contain important information, including the terms and
conditions of the offer. Once filed, SafeNet stockholders will be
able to obtain the offer to purchase and related materials with
respect to the offer free of charge at the SEC�s website at
www.sec.gov, from the information agent named in the tender offer
materials or from Stealth Acquisition Corp.
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