Aladdin Knowledge Shareholders OK Vector Buyout

Aladdin Knowledge Systems (Nasdaq: ALDN) shareholders have approved Vector Capital’s offer to buy the company for $11.50 per share, or approximately $160 million. Last year, Aladdin rejected a $13 per share offer from Vector. Wells Fargo Foothill has committed to provide leveraged financing for the buyout. Aladdin is an Israeli maker of security software.

PRESS RELEASE

Aladdin Knowledge Systems Ltd. (“Aladdin” or the “Company”) (NASDAQ: ALDN) today announced that its shareholders approved the definitive merger agreement, providing for the acquisition of the Company by a Vector Capital affiliate, during a special general meeting of the shareholders held today. The shareholders also approved the amendment to the articles of association of the Company relating to exculpation, insurance and indemnity of directors and officers and the amendment of the indemnification agreements with the Company’s directors as well as the renewal of the Company’s existing directors’ and officers’ insurance and the purchase of a run-off directors’ and officers’ insurance policy. 

Under the terms of the merger agreement, Aladdin shareholders will receive $11.50 per share in cash for each ordinary share they hold at the closing of the merger plus an amount in cash equal to each shareholder’s pro rata portion of the amount, if any, by which the Company’s Cash (as defined in the merger agreement) exceeds $12,000,000. The transaction is expected to close at the end of March, subject to the satisfaction of closing conditions set forth in the merger agreement, which include: anti-trust approvals in Israel and Germany or the expiration of applicable waiting periods; the Company having minimum cash and cash equivalents of at least $7,000,000 and minimum working capital of at least $13,500,000 at the time of closing; Company’s representations and warranties (including not having a material effect) are true and correct at the time of closing; and compliance with covenants. 

Following completion of the merger, Aladdin’s ordinary shares will cease to be traded on NASDAQ and the Tel Aviv Stock Exchange.

 About Vector Capital

Vector Capital is a leading private equity firm specializing in spinouts, buyouts 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 LANDesk Software, Savi Technology, SafeNet, Corel Corporation (Nasdaq: CREL), Precise Software Solutions, Printronix, Register.com, Tripos, WinZip and Watchguard Technologies. For more information, visit www.vectorcapital.com.

About Aladdin

Aladdin Knowledge Systems (NASDAQ: ALDN) is an information security leader with offices in 15 countries, a worldwide network of channel partners, and numerous awards for innovation. Aladdin eToken is the world’s #1 USB-based authentication solution, offering identity and access management tools that protect sensitive data. Aladdin SafeWord two-factor authentication technology protects companies’ important information assets and applications. Aladdin HASP SRM boosts growth for software developers and publishers through strong anti-piracy protection, IP protection, and secure licensing and product activation. Aladdin eSafe delivers real-time intelligent Web gateway security that helps protect data and networks, improves productivity, and enables compliance. Visit www.Aladdin.com.