The saga of Viavi Solutions’ pursuit of competitor EXFO appears to be over. A majority of EXFO’s minority shareholders have voted to take the test company private in a transaction with its majority shareholder, founder and executive chairman Germain Lamonde.
A 30-minute virtual meeting on Friday officially set the path forward for EXFO as a company: It will become a privately held company once more, under Lamonde’s offer to buy out minority shareholders at $6.25 per share — despite multiple attempts by Viavi Solutions to acquire EXFO at higher per-share prices. Lamonde, the company’s controlling shareholder, rejected those offers repeatedly and publicly, making clear that he would not support of an acquisition by Viavi and that the only choice facing EXFO’s minority shareholders was that of whether to allow the company to remain public or to take it private under the arrangement he offered. Lamonde directly or indirectly controls 61.46% of the issued and outstanding shares of EXFO and 93.53% of the voting rights associated with those shares.
Shareholders representing 97.49% of the votes entitled to be cast at the meeting were represented either by proxy or in person, according to EXFO investor relations; shares held by either Lamonde or current EXFO CEO Phillippe Morin were excluded from the vote. The transaction was approved by wide margins: 99.65% of the votes cast by shareholders voting together as a single class, and 90.95% of the votes cast by the holders of subordinate voting shares (excluding Lamonde and Morin).
The meeting was brief, with most of it spent laying out the context for the transaction: The repeated offers by Viavi and refusals by Lamonde. Neither Lamonde nor Morin spoke, and most of the votes from minority shareholders had been made by proxy ahead of the actual meeting.
“I would like to thank EXFO shareholders for their continued support over the years and in relation to the proposed transaction,” said Lamonde in a statement released after the vote.
Viavi had made one more stab at keeping its $8-per-share offer in the running, continuing its strategy of taking the conversation public by using press releases to make its case. In the week prior to the vote, Viavi put out a release saying that proxy advisory firm Glass, Lewis & Co. was advising minority shareholders to vote against the arrangement and arguing that the EXFO board’s special committee on the matter — from which Lamonde and Morin have recused themselves — ought to “uphold their fiduciary duty to act in the best interest of all shareholders – and to stop recommending Mr. Lamonde’s inferior going private transaction that deprives shareholders of an additional $2.00 per share in value. EXFO minority shareholders deserve better.”
The go-private transaction still undergo typical approvals before closing, including approval by the Superior Court of Québec.
A recording of the virtual shareholder meeting is available in French and English here.
