SEAC - SeaChange Announces an Agreement to be Acquired by Enghouse and Termination of Previously Announced Proposed Acquisition by Partner One | Benzinga
BOSTON, April 24, 2024 (GLOBE NEWSWIRE) -- SeaChange International, Inc. (OTC:SEAC) ("SeaChange" or the "Company"), a leading provider of video delivery, advertising, streaming platforms, and emerging Free Ad-Supported Streaming TV services (FAST) development, has entered into an asset purchase agreement (the "Enghouse Purchase Agreement") under which an affiliate of Enghouse Systems Limited ("Enghouse"), a leading global telecommunication technology and solutions company that provides next generation communications solutions to communication service providers (including TV / cable operators), media companies, defense, public safety agencies, and utilities, will acquire substantially all of SeaChange's assets related to its product and services business (the "Enghouse Asset Sale"), and will assume certain liabilities, for a total purchase price of $39 million, less SeaChange's cash and cash equivalents at closing ("Closing"). The Company currently expects the transaction will result in net proceeds to SeaChange of between $21 to $23 million upon Closing.
The Enghouse Asset Sale, which has been approved by SeaChange's Board of Directors (the "Board"), is subject to various terms and closing conditions, including approval by a majority of the shares of SeaChange's outstanding common stock. Subject to such closing conditions, Closing is expected to occur in early May 2024.
"When we set out to identify a strategic partner for SeaChange, our two key goals were to maximize stockholder value and to find a larger home for the SeaChange assets within which the business could scale. With Enghouse's commitment to SeaChange and their customer-centric vision for the business, both goals are met. Enghouse has a remarkable track record of embedding software businesses into their highly efficient operational framework, and we are looking forward to seeing SeaChange thrive within the Enghouse family," said Chris Klimmer, CEO at SeaChange.
Similar to the Partner One Transaction (as defined and discussed below), following Closing, the Company will retain its cash and cash equivalents, and U.S. and state net operating loss carryforwards ("NOLs"), which may be available to offset future tax income. The Enghouse Purchase Agreement also contains a termination fee payable to Enghouse in connection with the termination of the Enghouse Purchase Agreement under certain circumstances, such as consummation of an alternative acquisition transaction in connection with a Superior Proposal (as defined in the Enghouse Purchase Agreement). However, the termination fee in the Enghouse Purchase Agreement is $1.3 million.
In addition, similar to the Partner One Transaction, concurrently with the execution of the Enghouse Purchase Agreement, a significant stockholder (the "Significant Stockholder") of the Company, that cumulatively owns approximately 30.5% of the shares of SeaChange's outstanding common stock, has entered into a voting agreement with Enghouse pursuant to which the Significant Stockholder has agreed, subject to the terms and conditions therein, to vote its shares of common stock of the Company to approve the Enghouse Asset Sale at the SeaChange special meeting of stockholders (the "Special Meeting").
Termination of the Partner One Acquisition
As previously announced on March 11, April 10 and April ...