TORONTO, Dec. 13, 2019 /CNW/ - VersaPay
Corporation (TSXV: VPY) ("VersaPay" or the "Company") and
Great Hill Partners ("Great Hill"), a leading growth-oriented
private equity firm, are pleased to announce that the Company and
an affiliate of Great Hill have entered into a definitive
arrangement agreement (the "Arrangement Agreement") whereby Great
Hill will indirectly acquire all of the issued and outstanding
common shares of the Company ("VersaPay Shares") by way of a
statutory plan of arrangement under the Canada Business
Corporations Act (the "Transaction").
Under the terms of the Arrangement Agreement, each VersaPay
shareholder (the "VersaPay Shareholders") will receive cash
consideration of C$2.70 for each
VersaPay Share held (the "Consideration"), valuing VersaPay's total
equity at approximately C$126 million
on a fully diluted basis. The Consideration represents a 47.5%
premium to the closing price of the VersaPay Shares on the TSX
Venture Exchange (the "TSXV") on December
12, 2019 and a 64.5% premium to the volume weighted average
price ("VWAP") of the VersaPay Shares over the last 30 trading
days.
Benefits to VersaPay Shareholders
- Immediate and significant premium of approximately 47.5% to the
closing price of the VersaPay Shares on December 12, 2019, and approximately 64.5% based
on the 30-day VWAP.
- All cash offer that is not subject to a financing
condition.
"We are very pleased to be able to recommend this transaction to
our shareholders, employees and customers," commented Art Mesher, Chairman of the Company, "With their
deep knowledge of our industry and focus on supporting growth
companies, Great Hill is uniquely positioned to understand our
business and its long term potential, and help the Company to
achieve that potential".
"Great Hill is excited to partner with the VersaPay team and
provide the capital to execute on their growth strategies" stated
Matt Vettel, Managing Partner at
Great Hill Partners. Craig O'Neill,
CEO of the Company added, "I'd like to thank our employees who have
worked so hard to achieve the growth and success we've experienced
to date, our customers who have put their trust in us, and our
shareholders who have supported us as a public company. We're
equally excited about our future working alongside Great Hill."
Independent Committee and Board of Directors
Recommendations
An independent committee of VersaPay's Board of Directors (the
"Committee") comprised of Arthur
Mesher, Sheldon Pollack and
David Dobson was constituted to
consider the Transaction. Capital Canada Limited has
provided a fairness opinion to the Committee (the "Fairness
Opinion") stating that in its opinion, and based upon and subject
to the assumptions, limitations and qualifications set forth
therein, the Consideration to be received by the VersaPay
Shareholders pursuant to the Transaction is fair, from a financial
point of view, to the VersaPay Shareholders.
The Board of Directors, after receiving financial and legal
advice, and following receipt of the Fairness Opinion and the
unanimous recommendation of the Committee, has unanimously
determined that the Transaction is in the best interests of
VersaPay and is unanimously recommending that VersaPay Shareholders
vote in favour of the Transaction.
In addition, directors and senior officers of VersaPay, who as
of the date hereof collectively hold approximately 3.7% of the
VersaPay Shares, have entered into agreements to support the
Transaction and vote their VersaPay Shares in favour of the
Transaction.
Transaction Conditions and Timing
The Transaction will be implemented by way of a statutory plan
of arrangement under the Canada Business Corporations Act
and will require the approval of 66 2/3% of the votes cast by
VersaPay Shareholders at a special meeting of VersaPay shareholders
to be called to approve the Transaction (the "Special
Meeting").
The completion of the Transaction will also be subject to
obtaining required court and other approvals and satisfaction of
closing conditions customary for a transaction of this nature.
The Arrangement Agreement includes customary deal-protection
provisions. VersaPay is subject to non-solicitation
provisions and in certain circumstances, the Board of Directors may
terminate the Arrangement Agreement in favour of an unsolicited
superior proposal, subject to the payment of a termination fee of
C$5.67 million and subject to a right
of Great Hill to match such superior proposal. The
Arrangement Agreement also provides for payment by Great Hill of a
reverse termination fee of C$7.56
million if the Arrangement Agreement is terminated in
certain specified circumstances, including if Great Hill does not
satisfy its obligation to provide sufficient funds to complete the
Transaction.
It is anticipated that the Special Meeting will be held in
February 2020. Following closing of
the Transaction, the VersaPay Shares would be delisted from the
TSXV. The Transaction is expected to close in the first quarter of
2020.
Advisors and Counsel
INFOR Financial Inc. is acting as exclusive financial
advisor to VersaPay in connection with the Transaction. Capital
Canada Limited provided the Fairness Opinion in connection
with the Transaction. Cassels Brock
& Blackwell LLP is acting as Canadian counsel to VersaPay and
Arnold & Porter Kaye Scholer LLP is acting as U.S. counsel to
VersaPay.
Blake, Cassels & Graydon LLP is acting as Canadian counsel
to Great Hill and Alston & Bird LLP is acting as U.S. counsel
to Great Hill.
Additional Information about the Proposed Transaction
A copy of the written Fairness Opinion, and a description
of the various factors considered by the Board of Directors of the
Company in its determination to approve the Transaction, as well as
other relevant background information, will be included in the
management information circular to be sent to the Company's
shareholders in advance of the Special Meeting. The management
information circular, the Arrangement Agreement, including the plan
of arrangement, and certain related documents will be filed with
the Canadian securities regulators and will be available on SEDAR
at www.sedar.com.
About Great Hill
Great Hill Partners is a Boston-based private equity firm targeting
investments of $25 million to
$500 million in high-growth companies
across the consumer, digital infrastructure, financial technology,
healthcare, and software sectors. Over the past two decades, Great
Hill has raised nearly $8 billion of
commitments and invested in more than 75 companies, establishing an
extensive track record of building long-term partnerships with
entrepreneurs and providing flexible resources to help
middle-market companies scale. For more information, visit
www.greathillpartners.com
About VersaPay Corporation
VersaPay is a Fintech company and leading provider of
cloud-based invoice-to-cash solutions, enabling businesses to
provide a superior customer experience, get paid faster, streamline
financial operations, and dramatically reduce DSO and costs.
VersaPay ARC is the first platform to provide Customer-Centric
AR™ with a customer self-service environment to view
invoices online, collaborate on inquiries and disputes, and
facilitate secure online payments (EFT/ACH and credit card).
Businesses gain access to a suite of powerful tools that enable
efficient collections, cash application and real-time insight into
accounts receivable. VersaPay ARC automatically reconciles payments
and account information through integrations with a wide range of
ERPs and accounting software providers.
More information about VersaPay is available at www.versapay.com
or under the Company's profile on SEDAR at www.sedar.com.
FORWARD LOOKING INFORMATION
This press release contains "forward-looking information" which
may include, but is not limited to, statements with respect to the
anticipated meeting date, timing for completion of the
Transaction and delisting from the TSXV.
Generally, forward-looking information can be identified by the
use of terminology such as "anticipates", "believes", "expects",
"plans", "intends", "estimates", "schedules", "forecasts",
"budgets", "proposes", or variations or comparable language of such
words and phrases or statements that certain actions, events or
results "may", "could", "would", "should", "might" or "will",
"occur" or "be achieved" or the negative connotation thereof.
Forward-looking information is based upon certain assumptions
and other important factors that, if untrue or incorrect, could
cause the actual results, performance or achievements of the
Company to be materially different from future results, performance
or achievements expressed or implied by such information. Such
information is based on numerous assumptions regarding present and
future business strategies and the environment in which the Company
will operate in the future, including: the Company's plans with
respect to its products and services, including timing, content and
pricing; market and industry expectations; a continuing increase in
the number of customer relationships; the length of the sales
cycles; the competitive environment; the ability to maintain or
accurately forecast revenue from the Company's products or
services; the ability of the Company to identify, hire, train,
motivate and retain qualified personnel; the ability of the Company
to develop, introduce and implement new products as well as
enhancements or improvements for existing products that respond, in
a timely fashion, to customer/product requirements and rapid
technological change; general economic, business and political
conditions; stock market volatility; anticipated costs and ability
to achieve goals; the impact of any changes in the laws and
regulations in the jurisdictions in which the Company operates; and
the effect of new accounting pronouncements or guidance. Although
the Company believes its expectations are based upon reasonable
assumptions and has attempted to identify important factors based
on its current expectations, estimates and projections that could
cause actual actions, events or results to differ materially from
those described in forward-looking information, these are subject
to a number of significant risks and uncertainties and there may be
other factors that could cause actions, events or results not to be
as anticipated, estimated or intended.
Forward-looking information is subject to known and unknown
risks, uncertainties and other important factors that may cause the
actual results, level of activity, performance or achievements of
the Company to be materially different from those expressed or
implied by such forward-looking information, including but not
limited to risks related to: taxes, reliance on third-party service
providers, potential failures of VersaPay and third-party systems,
failure to develop or market new products or services, intellectual
property, third-party claims for intellectual property
infringement, privacy breach by service providers, merchant fraud,
security breaches, service interruptions by cyber-terrorists or
fraudulent or illegal use of services, competition, additional
financing, variable revenues/earnings, dependence on key personnel,
merchant attrition, loss of sales partners, increases in
interchange rates, non-sufficient funds, market demand for products
and services, changes in consumer spending, operating risk and
insurance, conflicts of interest, stock price volatility,
government regulations, litigation, general economic conditions,
foreign exchange, liquidity, interest rates, internal controls and
acquisitions strategy, as more particularly described in the
section entitled "Risk Factors" in the Company's Annual Information
Form for the year ended December 31,
2018 dated April 2, 2019. The
foregoing list is not exhaustive and other risks are detailed from
time to time in other continuous disclosure filings of the Company.
Should one or more of these risks or uncertainties materialize, or
should assumptions underlying the forward-looking information prove
incorrect, actual results may vary materially from those described
herein as anticipated, believed, estimated or expected.
Accordingly, readers should not place undue reliance on
forward-looking information.
Although the Company has attempted to identify important factors
that could cause actual actions, events or results to differ
materially from those described in forward-looking information,
there may be other factors that cause actions, events or results to
differ from those anticipated, estimated or intended.
Forward-looking information contained herein are made as of the
date of this press release and the Company disclaims any obligation
to update any forward-looking information, whether as a result of
new information, future events or results, except as may be
required by applicable securities laws. There can be no assurance
that forward-looking information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such information. Accordingly, readers should not
place undue reliance on forward-looking information.
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SOURCE VersaPay Corporation
