TEOCO Corporation ("TEOCO"), a market leader in providing cost,
routing, and revenue management solutions to leading communications
service providers worldwide, and TTI Team Telecom International
Ltd. (NASDAQ: TTIL), a global supplier of Operations Support
Systems (OSS) to communications service providers, announced today
that they have entered into a definitive merger agreement, whereby
TEOCO will acquire TTI Telecom in a transaction valued at
approximately US$58.0 million, subject to adjustments.
Under the terms of the merger agreement, TTI Telecom preferred
and ordinary shareholders will receive US$3.00 per share in cash at
the closing, without interest and less applicable withholding tax.
This purchase price per share may be increased or decreased at
closing to the extent that TTI Telecom’s cash balance immediately
prior to closing is above or below the respective agreed upon
amounts, and will be decreased to the extent TTI Telecom’s
transaction expenses are above an agreed upon amount, with a
minimum share price of US$2.90. The Company advises that it
currently does not expect an upward adjustment above the US$3.00
per share merger consideration.
The price per share of US$3.00 represents a premium of
approximately 50% over the Company's average closing share price
during the 90 trading days ended June 8, 2010. The Board of
Directors of TTI Telecom approved the agreement and recommended
that TTI shareholders vote in favor of the transaction.
Atul Jain, Chairman and Chief Executive Officer, TEOCO
Corporation, said, “We believe that adding TTI’s employees,
assets, and solutions under one umbrella will enable TEOCO to
provide unprecedented value to our respective clients. This
combination brings together two industry leaders whose solutions
contribute greatly to increasing the profitability and success of
global communications service providers."
“I am very impressed with the caliber of the people in TTI and
their deep expertise in network management. We plan to bring the
talent of the two teams together over the next 12 months which will
yield greater innovation for our clients and create an exciting
work environment for our employees,” Mr. Jain concluded.
Meir Lipshes, Chairman of the Board of Directors and Chief
Executive Officer of TTI Telecom, commented on the transaction,
"Although encouraged by the latest technical evolutions in the OSS
market and by the planning of a new LTE solution, we also
recognized, in light of recent years’ series of acquisitions of
smaller OSS companies by larger competitors, the challenges of
continuing the path as an independent public company operating in a
competitive and consolidating market. Therefore, after a careful
and thorough analysis, and with the completion of extensive
negotiations with TEOCO, the Board of Directors has decided to
endorse this transaction as being in the best interest of our
shareholders, customers and employees. We have high regards for
TEOCO and are excited about the future opportunities that this
transaction presents to our shareholders, partners, customers and
employees."
Key Benefits of the Transaction
This combination will result in a company whose international
business will be a significant contributor to its growth which,
along with TEOCO’s success in North America, will allow it to offer
increased value to communications service providers worldwide.
TEOCO and TTI Telecom have a combined 35 years of industry
expertise and serve over 75 communications service providers
worldwide. Other key benefits include:
- Greater Value for Customers - The
combined company unifies Cost, Revenue, Routing, and Network
Management in one global organization. This means greater product
integration, improved global customer service, and solutions that
deliver greater value for our customers.
- Deep Industry Expertise - The
combined company will have over 600 employees whose key expertise
is dedicated to support global communication service providers.
Many of these individuals are thought leaders in LTE, WI-Max, VoIP
as well as traditional voice technologies.
- Financial Strength and Flexibility
- The combined company will be financially strong and
profitable. With over 75 global customers, representing 25
countries, the company has the ability to make the R&D
investments necessary to support and deploy solutions for the next
generation of communication technologies.
Timing; Go-Shop and Approvals
The closing of the transaction is subject to shareholders
approval, including separate class meetings of the ordinary and
preferred shares; certain regulatory approvals; and other customary
closing conditions. There is no financing condition to the
obligations of TEOCO to consummate the transaction and it is
currently anticipated that the transaction will be consummated in
the third quarter of 2010. Upon the closing of the transaction, TTI
ordinary shares would no longer be traded on NASDAQ.
Under the terms of the agreement, TTI Telecom may, subject to
compliance with various conditions, actively solicit superior
proposals from third parties until July 9, 2010 and may consider
unsolicited proposals made by third parties. TEOCO has a right to
match any superior proposal. TTI Telecom does not intend to
disclose developments with respect to this solicitation process,
except as may be required by law. There can be no assurance that
the solicitation of superior proposals will result in an
alternative transaction. If the Company accepts a superior
proposal, a break-up fee would be payable by the Company to
TEOCO.
Holders of an aggregate of approximately 24% of TTI's
outstanding ordinary and preferred shares, on an as converted
basis, have entered into voting undertakings with TEOCO under which
they have agreed to vote their shares in favor of the transaction.
These undertakings will expire upon termination of the merger
agreement.
Advisors
Oppenheimer & Co. Inc. served as TTI Telecom's exclusive
financial advisor, and Goldfarb, Levy, Eran, Meiri, Tzafrir &
Co. and McDermott Will & Emery LLP served as TTI Telecom's
legal counsels. Meitar Liquornik Geva & Leshem Brandwein served
as legal counsel to TEOCO.
About TEOCO
TEOCO is the market leader in providing cost, routing, and
revenue management solutions to leading communications service
providers worldwide. Over 50 of the industry’s leading providers
trust TEOCO to deliver unparalleled visibility and control over
their operations. Fueled by industry leading expertise and
innovative technologies, TEOCO saved its customers several hundred
million dollars last year alone.
Founded in 1995, TEOCO (The Employee Owned Company) has been
ranked one of the fastest growing companies by Inc. Magazine on
three occasions. TEOCO is widely recognized for its commitment to
principled entrepreneurship, business ethics and employee ownership
with a particular emphasis on its core values of alignment with
employees, clients and community. TEOCO has recently been invested
in by TA Associates, a $16B global growth private equity firm based
in Boston, MA. For more information, please visit
www.teoco.com.
About TTI Telecom
TTI Team Telecom International Ltd. is a leading provider of
next generation Operations Support Systems (OSS) to communications
service providers worldwide. The Company's Netrac portfolio
delivers an automated, proactive and customer-centric approach to
service assurance and network management.
Anchored by market-leading service assurance solutions --
Fault Management (FaM) and Performance Management (PMM) --
that give customers an end-to-end view of their network, TTI's
Netrac enables service providers to reduce operating costs, enhance
profitability and launch new, revenue-generating services more
rapidly. Netrac is compatible with multiple technologies and
industry standards, and is uniquely positioned to bridge legacy,
next-generation, convergent, and IMS Networks. TTI Telecom's
customer base consists of tier-one and tier-two service providers
globally, including large incumbents in the Americas, Europe and
Asia-Pacific. For more information, please visit
www.tti-telecom.com.
Additional Important Information and Where to Find It
In connection with the proposed transaction, TTI Telecom will
prepare a proxy statement to be delivered to its shareholders.
INVESTORS AND SECURITY HOLDERS ARE STRONGLY ADVISED TO READ THE
PROXY STATEMENT WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION, INCLUDING WITH RESPECT TO THE POTENTIAL
ADJUSTMENTS IN THE PER SHARE MERGER CONSIDERATION. The proxy
statement and other documents may be obtained for free from the
Company’s Web site at www.tti-telecom.com/investor-relations or by
directing such request to TTI Investor Relations below.
Forward-Looking Statements
Certain statements in this press release, including but not
limited to those relating to the proposed merger transaction,
constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of TTI Telecom to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Statements
preceded by, followed by or that otherwise include the words
"believes", "expects", "anticipates", "intends", "projects",
"estimates", "plans", "may increase", "may fluctuate" and similar
expressions or future or conditional verbs such as "will",
"should", "would", "may" and "could" are generally forward-looking
in nature and not historical facts. Any statements that refer to
expectations or other characterizations of future events,
circumstances or results are forward-looking statements. Various
factors that could cause actual results to differ materially from
those expressed in such forward-looking statements include but are
not limited to risks associated with uncertainty as to whether the
merger transaction will be completed; the potential adjustments to
the purchase price per share; the occurrence of any event, change
or other circumstances that could give rise to the termination of
the merger agreement; costs and potential litigation associated
with the merger transaction; the failure of either party to meet
the closing conditions set forth in the merger agreement; risks
that the proposed merger transaction disrupts current plans and
operations and the potential difficulties in employee retention as
a result of the proposed transaction; the distraction of management
and TTI Telecom resulting from the proposed transaction; and the
other risk factors discussed from time to time by TTI Telecom in
reports filed or furnished with the Securities and Exchange
Commission (“SEC”).
In light of these risks, uncertainties, assumptions and factors,
the forward-looking events discussed in this press release may not
occur. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date stated,
or if no date is stated, as of the date of this press release.
Except for TTI Telecom's ongoing obligations to disclose material
information under the federal securities laws, TTI Telecom
undertakes no obligation to release any revisions to any
forward-looking statements, to report events or to report the
occurrence of unanticipated events unless required by law.
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