RAE Systems Inc. (NYSE Amex: RAE), a leader in delivering
innovative sensor solutions to serve industrial, energy,
environmental, and government safety markets worldwide, signed a
definitive agreement to be acquired for $1.60 per share in cash by
an affiliate of Battery Ventures, a multi-stage investment firm
focused on technology and innovation worldwide. The purchase price
represents a premium of approximately 53.8% over RAE Systems'
closing share price on September 17, 2010, and a premium of
approximately 85.1% over RAE Systems' average closing share price
for the 30 trading days ending on September 17, 2010.
This transaction is subject to customary closing conditions,
including the approval of RAE Systems' stockholders. There is no
financing condition to the transaction.
"Over the years, we have built a strong reputation in the safety
industry, a quality, diverse product and technology portfolio, and
a dedicated, result-oriented employee base, all of which are
contemplated in this transaction," said Robert Chen, RAE Systems
president and chief executive officer. "After an extensive review
of our strategic alternatives, the special committee of our board
of directors has determined that this transaction provides for the
best value to our stockholders. RAE Systems has successfully
navigated through a great deal of change over the past few years.
With this newest evolution, RAE Systems will leverage Battery
Ventures' strategy and vision to help increase its industry
presence via organic growth and complementary acquisitions. Looking
ahead, we will continue to execute on our strategy to be a leading
innovator through the advancement of intelligent, connected,
wireless gas and radiation detection solutions. Throughout this
transaction, RAE Systems management and employees will remain
committed to customer service, quality and operating
excellence."
Jesse Feldman, Battery Ventures Partner, stated, "RAE Systems
has significant long-term market growth potential, and we are
excited to partner with the company on driving this growth both
organically and through strategic acquisitions. Our prior
experience and growing interest in industrial technologies makes
RAE Systems a natural investment for Battery. We are eager to
support the company through its next phase of evolution and look
forward to working with RAE's talented employee base, valuable
customer and partner ecosystems, and industry leading technology
platform to get there."
A special committee of the RAE Systems Board of Directors and
the disinterested members of the board have unanimously approved
the agreement and recommend RAE Systems' stockholders approve the
transaction.
The company will file a proxy statement with the Securities and
Exchange Commission, and a shareholder meeting will be held within
60 days following the SEC's review. Management will hold a
conference call to discuss this transaction today, September 20, at
8:00 a.m. Pacific Time (11:00 a.m. Eastern Time). Access
instructions for the call are included later in this release.
After the completion of this transition, the RAE Systems board
of directors will include Mr. Chen and Dr. Peter C. Hsi,
co-founders of RAE Systems, who will also remain as stockholders in
RAE Systems, as well as Mr. Feldman and Morgan Jones of Battery
Ventures.
UBS Investment Bank is acting as financial advisor to the
Special Committee of the Board of RAE Systems, and Fenwick &
West LLP, is acting as legal advisor to the Special Committee.
Conference Call Details The conference
call will take place today, September 20, at 8:00 a.m. Pacific Time
(11:00 a.m. Eastern Time). The conference call will feature remarks
by Robert I. Chen, chief executive officer. Mr. Chen and Randall
Gausman, chief financial officer, will be available for a
question-and-answer session. The call can be accessed in the U.S.,
toll-free, by dialing 888-656-7430 and internationally by dialing
+01-913-981-5583 approximately 15 minutes prior to the start of the
call. Please use pass-code: 5094348. The conference call will also
be broadcast live over the Internet and available for replay for 90
days at www.raesystems.com. A replay of the call will also be
available via telephone for two days, beginning two hours after the
call. To listen to the telephone replay in the U.S., please dial
888-203-1112. International callers please dial +1-719-457-0820.
Enter access code 5094348.
About Battery Ventures Since 1983, Battery
has been investing in technology and innovation worldwide. The firm
partners with entrepreneurs and management teams across technology
sectors, geographies and stages of a company's life, from start-up
and expansion financing, to growth equity and buyouts.
Battery has supported many breakthrough companies around the
world, including @stake (acquired by Symantec), Airespace (acquired
by Cisco), Akamai Technologies, Inc. (NASDAQ: AKAM), Bladelogic
(acquired by BMC Software), Cbeyond (NASDAQ: CBEY), Healthvision
(acquired by Lawson), LIFFE (acquired by Euronext), Neoteris
(acquired by Netscreen), Nova Analytics (acquired by ITT) and
Omniture (acquired by Adobe). Its current portfolio includes firms
such as Brightree, Consona, ExactTarget, GreenBytes, HighJump
Software, Nova Holdings LLC, Opscode, Rogue Wave Software and Vero
Software.
Battery has a long history of technology-based private equity
transactions and is adept at complex deal structures across a
variety of market sectors. From offices in Boston, Silicon Valley
and Israel, Battery manages $4 billion in committed capital,
including its current fund of $750M. For more information, visit
www.battery.com.
About RAE Systems RAE Systems is a leading
global provider of rapidly deployable connected, intelligent gas
detection systems that enable real-time safety and security threat
detection. RAE Systems products are used in more than 95 countries
by many of the world's leading corporations and government
agencies. RAE Systems offers a full line of wirelessly enabled
solutions including personal, hand-held, transportable, and fixed
instruments designed to meet the needs of any usage scenario.
Applications include energy production, refining, industrial and
environmental safety, public venue safety and government first
responder markets. For more information about RAE Systems, please
visit www.raesystems.com.
Safe Harbor Statement This press release
may contain "forward-looking" statements, as that term is used in
Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements include, without limitation: expressions of "belief,"
"anticipation," or "expectations" of management; statements as to
industry trends or future results of operations of RAE Systems and
its subsidiaries; and other statements that are not historical
fact. These types of statements address matters that are subject to
risks and uncertainties, which could cause actual results to differ
materially. Factors that could cause or contribute to such
differences include, but are not limited to, the general economic
and industry factors, the resolution of issues associated with the
Company's Foreign Corrupt Practices Act, investigation and
receptiveness of the market to RAE Systems and its products. In
addition, our forward-looking statements should be considered in
the context of other risk factors discussed in our filings with the
Securities and Exchange Commission, including but not limited to
our annual report on Form 10-K and Form 10-Q filings, available
online at http://www.sec.gov. All forward-looking statements are
based on information available to the company on the date hereof,
and the company assumes no obligation to update such
statements.
Additional Information
About the Transaction and Where You Can Find It
In connection with the transaction, RAE Systems will file a
proxy statement with the SEC for RAE Systems' special stockholder
meeting and stockholders are strongly advised to read the proxy
statement when it becomes available because it will contain
important information about the Merger. Investors and stockholders
may obtain a free copy of the proxy statement (when available) and
other documents filed by RAE Systems at the SEC's web site at
http://www.sec.gov. The proxy statement (when available) and other
relevant documents may also be obtained for free from RAE Systems
by directing a request to RAE Systems, Inc., c/o Investor
Relations, 3775 North First Street, San Jose, California 95134,
telephone: 408-952-8200.
RAE Systems and its directors, executive officers and certain
other members of its management and employees may be deemed to be
participants in the solicitation of proxies from its stockholders
in connection with the proposed transaction. Certain information
regarding the interests of such directors and executive officers is
included in RAE Systems' Proxy Statement for its 2010 Annual
Meeting of Stockholders filed with the SEC on April 23, 2010, and
information concerning all of the participants in the solicitation
will be included in the proxy statement relating to the proposed
transaction when it becomes available. Each of these documents is,
or will be, available free of charge at the SEC's website at
http://www.sec.gov and from RAE Systems, Inc., c/o Investor
Relations, 3775 North First Street, San Jose, California 95134,
telephone: 408-952-8200.
IR Contact: Becky Herrick Lippert/Heilshorn & Associates,
Inc ph: 415-433-3777 bherrick@lhai.com Amy Grady Battery Ventures
ph: 650-372-3939 agrady@battery.com
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