Strengthened Balance Sheet Provides Ability to
Execute Strategic Objectives While Navigating Current Economic
Environment
Agilysys, Inc. (Nasdaq: AGYS), a leading global provider of
next-generation hospitality software solutions and services, today
announced a $35 million investment from MAK Capital One, LLC (“MAK
Capital”), a leading investment management firm that has been a
significant shareholder of the Company since 2007. Michael Kaufman,
the Chairman of the Board of Directors of Agilysys, is the Chief
Executive Officer of MAK Capital.
“We are pleased to expand our relationship with MAK Capital as
we look to best position our business and fortify our balance sheet
during this period of uncertainty,” said Ramesh Srinivasan,
Agilysys’ President and Chief Executive Officer. “This investment
will provide us the necessary capital to reinforce product and
customer service focus and increase our competitive advantage as we
manage through the current economic environment. We remain
confident in our strategic plan and long-term prospects and believe
this investment will permit us to carry forward our innovation and
other growth initiatives.”
Michael Kaufman, the Chairman of the Board of Directors of
Agilysys and the Chief Executive Officer of MAK Capital, said “We
are excited to extend our partnership with Agilysys. This
additional capital significantly strengthens the Company’s
financial profile and enables management to execute against
strategic objectives.”
MAK Capital will purchase $35 million of convertible preferred
stock that carries a 5.25% dividend, which will be payable in cash
or in-kind for up to 50% of any dividend payment, at Agilysys’
election. The preferred stock will be convertible into shares of
Agilysys common stock at a conversion price of $20.1676 per share,
representing a premium of 15% to Agilysys thirty-trading day
volume-weighted average price (VWAP). On an as-converted basis,
together with MAK Capital’s existing common shares of Agilysys, MAK
Capital will now own approximately 16.28% of pro forma common
shares outstanding. The completion of the transaction is subject to
customary closing conditions and will not occur prior to May 22,
2020, unless otherwise agreed by the parties.
Agilysys will file a Form 8-K with the Securities and Exchange
Commission containing additional information regarding the terms of
the convertible preferred stock.
Transaction Committee
A special transaction committee of independent directors (the
“Transaction Committee”) was established by the Board of Directors
of Agilysys to review, evaluate and consider the proposed terms of
the convertible preferred investment, as well as other alternatives
available to the Company, and determine if the convertible
preferred investment is in the best interests of the Company and
its shareholders. Following an evaluation of the convertible
preferred investment proposal and other potential financing
alternatives, the Transaction Committee concluded that the
convertible preferred investment was in the best interests of the
Company and its shareholders. Accordingly, the Transaction
Committee and its financial and legal advisors engaged in extensive
negotiations with MAK Capital with respect to various aspects of
the investment, including the proposed pricing. Having received the
unanimous recommendation of the Transaction Committee, the Board of
Directors of Agilysys (excluding Michael Kaufman, who did not
participate in deliberations) determined that the convertible
preferred investment is in the best interests of the Company and
its shareholders. Ramesh Srinivasan, Agilysys’ President and Chief
Executive Officer, was not involved in the deliberations, but was
involved in the confirmatory vote.
Advisors
J. Wood Capital Advisors LLC acted as financial advisor, and
Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal
advisor to Agilysys. MAK Capital was advised by Akin Gump Strauss
Hauer & Feld LLP.
Forward-Looking Language
This press release contains “forward-looking statements” within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by words such as: “anticipate,”
“intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,”
“expect,” “strategy,” “future,” “likely,” “may,” “should,” “will”
and similar references to future periods. Examples of
forward-looking statements include, among others, statements we
make regarding the effect of the investment on our business and
financial position and our ability to increase our competitive
advantage and to carry forward our innovation and other growth
initiatives.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations and assumptions regarding the
future of our business, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of our control. Our actual results and financial
condition may differ materially from those indicated in the
forward-looking statements. Therefore, you should not rely on any
of these forward-looking statements. Important factors that could
cause our actual results and financial condition to differ
materially from those indicated in the forward-looking statements
include, among others, the risk that the offering may be delayed or
may not occur due to the failure to satisfy customary closing
conditions related to the offering; the effect of the COVID-19
pandemic on our business and the success of any measures we have
taken or may take in the future in response thereto; and the risks
described in the Company’s filings with the Securities and Exchange
Commission, including the Company’s reports on Form 10-K and Form
10-Q.
Any forward-looking statement made by us in this press release
is based only on information currently available to us and speaks
only as of the date on which it is made. We undertake no obligation
to publicly update any forward-looking statement that may be made
from time to time, whether written or oral, whether as a result of
new information, future developments or otherwise
About Agilysys
Agilysys has been a leader in hospitality software for more than
40 years, delivering innovative guest-centric technology solutions
for gaming, hotels, resorts and cruise, corporate foodservice
management, restaurants, universities, healthcare, and sports and
entertainment. Agilysys offers the most comprehensive software
solutions in the industry, including point-of-sale (POS), property
management (PMS), inventory and procurement, payments, and related
applications, to manage the entire guest journey. Agilysys is known
for its leadership in hospitality, its broad product offerings and
its customer-centric service. Some of the largest hospitality
companies around the world use Agilysys solutions to help improve
guest loyalty, drive revenue growth and increase operational
efficiencies. Agilysys operates across the Americas, Europe, the
Middle East, Africa, Asia-Pacific, and India with headquarters
located in Alpharetta, GA.
For more information, visit www.agilysys.com.
About MAK Capital
MAK Capital One, LLC is a New York based investment management
firm established in 2002 by its founder, owner and Chief Executive
Officer Michael A. Kaufman. The firm manages both a multi-strategy
hedge fund and a private equity style distressed drawdown fund. MAK
takes a long-term investment approach and invests in a wide range
of securities and financial instruments including, but not limited
to, equity and debt securities including preferred and convertible
securities, bank and high-yield debt, ownership stakes in
small-capitalization companies, commodities, currencies, options,
swaps, investment partnerships, warrants, futures and other
derivative financial instruments.
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version on businesswire.com: https://www.businesswire.com/news/home/20200511005572/en/
Media: Robert Shecterle, Agilysys, Inc., 770-810-6046,
robert.shecterle@agilysys.com
Investors: Dave Wood, Agilysys, Inc., 770-810-7920,
dave.wood@agilysys.com
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