LOS ANGELES, March 17, 2020 /PRNewswire/ -- B. Riley
Financial, Inc. (NASDAQ: RILY) ("B. Riley"), a diversified provider
of business advisory and financial services, today announced it has
sent the following letter to the Board of Directors of SPOK
Holdings, Inc. on behalf of its subsidiary, B. Riley Capital
Management, LLC.
March 16,
2020
SPOK Holdings, Inc.
6850 Versar Center, Suite 420
Springfield, VA 22151
To the Board of Directors:
On behalf of B. Riley Capital
Management, LLC and certain of its affiliates, I am pleased to make
this proposal to acquire all of the outstanding shares of common
stock of SPOK Holdings, Inc. ("SPOK" or the "Company") for
$12.00 per share. Our all cash
proposal represents an approximate 39% premium over the current
price for SPOK's common stock based on yesterday's close. B. Riley
currently owns approximately 500,000 shares of the Company, or
approximately 2.6% of SPOK's total shares outstanding.
Our parent organization, B. Riley
Financial, Inc. (NASDAQ: RILY), is a publicly traded, diversified
financial services company, operating a variety of businesses,
including investment banking, brokerage, asset valuation and
appraisal, management, disposition and advisory services. We
have a long history of successfully closing on strategic
acquisitions of public and private companies and returning
significant value to their owners in the process. This
includes our acquisition of three publicly traded companies –
magicJack VocalTec Ltd. in 2018, FBR & Co. in 2017, and United
Online, Inc. in 2016. In particular, our magicJack
transaction demonstrates our ability to navigate the regulatory
process required for acquisitions of companies with Federal
Communications Commission licenses. B. Riley currently has a
market capitalization of approximately $450
million and cash, net securities and other liquid assets of
over $800 million and, accordingly,
the proposed transaction would not be subject to a financing
condition.
After studying SPOK's businesses
and strategy for creating equity value over the course of the last
several years, we have concluded that its shareholders cannot
realize a fair valuation within the confines of its current
structure. Ultimately, SPOK is an undersized holding company
with the costs and infrastructure of a much larger company
servicing two dramatically different business units. In
addition, the financial burden of being a public company is
disproportionately detrimental to a company with SPOK's relatively
small scale. We believe that B. Riley will offer a perfect
strategic fit to harness and utilize the cash flow generated by the
paging business, and investment and duration needed to maximize the
value of software. Our scale and diversification allow us to
be an excellent fit for both of these businesses.
While this proposal is
non-binding, given our knowledge of the Company's assets and our
work completed to date, we would require only limited due diligence
to arrive at a definitive acquisition agreement. We would be
willing to allow SPOK a customary go-shop and, as noted above, we
have the capability to consummate the transaction without a
financing contingency.
Given our long history of
successful acquisitions and the current environment, we believe
that bringing this offer to the Company's Board of Directors and
its stockholders simultaneously is in the best interests of all
constituencies. Nevertheless, we are prepared to immediately
enter into negotiations with the Company on the terms and
conditions of a definitive agreement and we look forward to
discussing our proposal with you in more detail.
Sincerely,
Bryant Riley
Chairman and Co-Chief Executive Officer
B. Riley Financial, Inc.
About B. Riley Financial, Inc. (NASDAQ:RILY)
B. Riley
Financial provides collaborative financial services tailored to fit
the capital raising and business advisory needs of public and
private companies and high-net-worth individuals. The Company
operates through several wholly owned subsidiaries which offer
complementary end-to-end capabilities spanning investment banking
and institutional brokerage, private wealth and investment
management, corporate advisory, restructuring, due diligence,
forensic accounting and litigation support, appraisal and
valuation, and auction and liquidation services. Certain registered
affiliates of B. Riley originate and underwrite senior secured
loans for asset-rich companies. The Company also makes proprietary
investments in companies and assets with attractive return
profiles. For more information about B. Riley and its affiliated
companies, visit www.brileyfin.com.
Contacts
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Investors
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Media
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B. Riley
Financial
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Jo Anne
McCusker
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ir@brileyfin.com
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jmccusker@brileyfin.com
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(310)
966-1444
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(646)
885-5425
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SOURCE B. Riley Financial