Hubspoke Holdings Acquires Telecom Expense Management Solutions Provider Veramark
June 26, 2013
By Calvin Azuri
, TMCnet Contributor
Veramark Technologies (News - Alert) Inc., a provider of telecom expense management solutions, has revoked the merger contract signed with Varsity Acquisition LLC and All Big Ten Holdings, Inc. and agreed to be acquired by Hubspoke Holdings, Inc. and TEM Holdings, Inc.
Veramark’s telecom expense management solutions can be scattered across an organization to areas such as contracts, invoices, inventory of services, employee policies and call data and translate them into actionable information that can be used to contain costs, enhance services, improve regulatory compliance and meet other strategic business goals.
As part of the contract, Merger Sub will buy in cash all the remaining shares of Veramark Common Stock along with in-the-money options for $1.18 for each share. The contract is however subject to modification for stock splits, stock dividends and comparable events. There will no interest applicable, and all withholding taxes will be deducted. The contract is valid, subject to the terms and conditions put forward in the offer letter delivered on June 17, 2013.
The offer cost is 66 percent more than the price of Veramark’s shares, aggregated across a period of 3 months. The offer price is also 55 percent more than the closing price of Veramark's shares on April 30, 2013, which is when the merger contract was signed with Varsity.
Both the offers were cautiously evaluated by a special committee of the Veramark’s Board of Directors, comprising exclusively of autonomous directors and the Board of Directors. The special committee found that the Hubspoke Merger Agreement was a better deal in comparison with the Varsity Merger Agreement. Veramark therefore ended the Varsity Merger Agreement and initiated the Hubspoke Merger Agreement.
Due to the 45-day go-shop right that was allowed under the Varsity Merger Agreement, Veramark was able to procure an alternative proposal from Hubspoke. Veramark was therefore able to aggressively seek proposals from third parties with help from its autonomous counselors.
Varsity will however receive $500,000 from Veramark as a termination fee.
Merger Sub will buy all remaining shares of Veramark Common Stock at a predefined price in cash. Merger Sub is also provided a choice to buy from Veramark the number of recently-issued shares of Veramark Common Stock, which will be equal to the lowest number of shares of Veramark Common Stock.
Edited by Rachel Ramsey