Radiant Agrees to Go Private – Again

Radiant Communications Corp.  (TSX-V: RCN), a Vancouver-based provider of managed network and cloud hosting solutions, has agreed to a going-private transaction involving an affiliate of Comwave Networks Inc. The deal, which implies an equity value for Radiant of approximately $25.3 million, has been approved by the company’s board of directors, and will be submitted to a vote by shareholders in October. Earlier this year, Radiant agreed to be taken private by affiliates of existing private equity investor Maxam Capital Corp. and investment firm PenderFund Capital Management, however, this transaction was subsequently terminated.


Radiant Communications Corp. Announces Proposed Going-Private Transaction

VANCOUVER, Aug. 23, 2013 /CNW/ – Radiant Communications Corp. (“Radiant” or the “Company”) (TSX-V: RCN) is pleased to announce that it has entered into a definitive agreement (the “Arrangement Agreement”) with 8612536 Canada Inc. (the “Purchaser”), an affiliated entity of Comwave Networks Inc., under which the Company would be taken private pursuant to a plan of arrangement (the “Plan of Arrangement”) under the provisions of the Canada Business Corporations Act.

Under the Plan of Arrangement, (i) the Purchaser will acquire all of the shares in the common stock of Radiant (“Common Shares”) that the Purchaser does not already own for cash consideration of $1.43 per Common Share (the “Consideration”) and (ii) all of the outstanding options of the Company (“Options”) will be cancelled and optionholders holding such Options that have an exercise price that is less than the Consideration will receive a cash amount equal to the amount by which the Consideration exceeds the exercise price payable under such Options.

The Consideration represents a 66% premium to the 20-day volume weighted average price of the Common Shares on the TSX Venture Exchange for the period ending August 23, 2013. The transaction implies an equity value for Radiant of approximately $25.3 million.

The board of directors of Radiant (the “Board”) has unanimously determined that the Plan of Arrangement is in the best interests of Radiant and is fair to its shareholders. The determination of the Board was made after consideration of the advice of legal advisors to the Company.

Kelly Edmison, Chairman of the Board, stated “This transaction provides a significant benefit to Radiant’s shareholders while at the same time offering the customers and employees of the company a broader portfolio of complimentary products and a long term growth opportunity within a very successful and highly competitive Canadian technology player. This transaction will add continued momentum to Radiant’s position as a leading competitor in the underserved medium and small enterprise telecom market.”

The implementation of the Plan of Arrangement will be subject to approval by not less than two-thirds of the votes cast by holders of Common Shares (“Shareholders”) and by not less than two-thirds of the votes cast by Shareholders and holders of Options voting as a single class at the special meeting of the Company (the “Special Meeting”) to be held on October 11, 2013. The transaction will also be subject to certain closing conditions customary in transactions of this nature.

The record date for the determination of securityholders of the Company entitled to receive notice of and to vote at the Special Meeting is September 6, 2013.

The Arrangement Agreement provides for, among other things, a non-solicitation covenant on the part of Radiant (subject to customary fiduciary out provisions). The Arrangement Agreement also provides the Purchaser with a “right to match” and requires the Company to pay, in certain circumstances, a $575,000 termination fee to the Purchaser. Pursuant to the Arrangement Agreement, the Purchaser has delivered into escrow the sum of $2,000,000 representing the amount of a reverse break fee to be released to the Company in certain circumstances in accordance with the terms and conditions of an escrow agreement, dated August 23, 2013, among the Purchaser, Radiant and LML&S Service Inc., a company owned and controlled by McMillan LLP, legal counsel to Radiant.

Each of Maxam Opportunities Fund LP and its affiliated entity, Maxam Opportunities Fund (International) LP, and Pender Growth Fund (VCC) Inc. and its affiliated entity, Pender Financial Group Inc., which collectively own approximately 76% of the issued and outstanding Common Shares, has entered into a lock-up agreement with the Purchaser to vote the outstanding Common Shares that it holds in favour of the Plan of Arrangement

The terms and conditions of the proposed transaction will be disclosed in an information circular that will be mailed in September 2013 to the securityholders of Radiant that will be entitled to vote at the Special Meeting. It is anticipated that the transaction, if approved by Radiant securityholders and the Supreme Court of British Columbia (the “Court”), will be completed by mid-October 2013.

The Radiant leadership team will remain an integral part of Radiant’s accelerated growth and the commitment to provide Canada’s largest retail brands with secure and seamless data solutions will remain the cornerstone to Radiant’s success. “Our customers can rest assured that it is business as usual at Radiant. I am pleased with the continuity this transaction presents to our loyal customers and our devoted staff”, said Paul Healey, President and Chief Executive Officer of Radiant.

McMillan LLP is acting as legal counsel to Radiant. Wildeboer Dellelce LLP is acting as legal counsel to the Purchaser.

Copies of the Arrangement Agreement, the information circular for the Special Meeting and certain related documents will be available on the System for Electronic Document Analysis and Retrieval (SEDAR) website at www.sedar.com.

About Radiant Communications Corp.

Radiant is a leading provider of managed network and cloud hosting solutions for medium-size enterprises. Leveraging one of the largest Internet footprints across Canada, Radiant offers a comprehensive portfolio of reliable, secure and scalable IT infrastructure services, simplified under a single point of contact. For over 15 years, many of Canada’s most recognized brand names have been relying on Radiant to support their mission-critical business operations.

About Comwave

Started by Yuval Barzakay in 2002, Comwave has grown to become Canada’s largest privately-owned telecommunications company and Canada’s largest VoIP provider serving both consumers and businesses in Canada and the United States. Comwave’s network stretches coast-to-coast to over 1,600 cities in Canada and the United States. Comwave products include Home Phone and Internet for consumers and Cloud Based Hosted PBX and Data for businesses. Comwave is also the underlying provider to the majority of VoIP providers in Canada who rely on Comwave’s network to deliver services to their customers.

Cautionary Statement

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-looking statements:

This press release may contain forward-looking information or forward-looking statements (collectively referred to as “forward-looking statements”), including statements that use forward-looking terminology such as “may”, “will”, “expect”, “anticipate”, “believe”, “continue”, “potential”, or the negative thereof or other variations thereof or comparable terminology. Such forward-looking statements may include, without limitation, statements regarding the completion of the proposed transaction, the holding of the Special Meeting and other statements that are not historical facts. While such forward-looking statements are expressed by Radiant, as stated in this release, in good faith and believed by Radiant to have a reasonable basis, they are subject to important risks and uncertainties including, without limitation, required Radiant securityholder approval and necessary Court approval, the satisfaction or waiver of certain other conditions contemplated by the Arrangement Agreement, and changes in applicable laws or regulations, which could cause actual results to differ materially from future results expressed, projected or implied by the forward-looking statements. As a result of these risks and uncertainties, the proposed transaction could be modified, restructured or not be completed, and the results or events predicted in these forward-looking statements may differ materially from actual results or events. These forward-looking statements are not guarantees of future performance, given that they involve risks and uncertainties. Radiant is not affirming or adopting any statements made by any other person in respect of the proposed transaction and expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities law or to comment on expectations of, or statements made by any other person in respect of the proposed transaction. Investors should not assume that any lack of update to a previously issued forward-looking statement constitutes a reaffirmation of that statement. Reliance on forward-looking statements is at investors’ own risk.

SOURCE Radiant Communications Corp.

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