Targets Potential Acquisition Candidates, Including DigiCore Holdings Limited
SAN DIEGO, June 4, 2015 (GLOBE NEWSWIRE) — Novatel Wireless, Inc.
(Nasdaq:MIFI) (the “Company”), a leading provider of solutions for the
Internet of Things (IoT) and inventors of MiFi(R) technology, today
announced that it has priced a private offering of $120 million
aggregate principal amount of the Company’s 5.50% Convertible Senior
Notes due 2020 (the “Convertible Notes”).
The Convertible Notes will be senior unsecured obligations of the
Company. The closing of the sale of the Convertible Notes is expected
to occur on June 10, 2015, subject to the satisfaction of customary
closing conditions.
The Convertible Notes will pay interest semi-annually at a rate of
5.50% per year and will mature on June 15, 2020, unless redeemed,
repurchased or converted in accordance with their terms prior to such
date. The Convertible Notes will have an initial conversion rate,
subject to adjustment, of 200.0000 shares of the Company’s common stock
per $1,000 principal amount of the Convertible Notes, representing a
conversion price of $5.00 per share of the Company’s common stock,
representing a conversion premium of 25% over the last reported sale
price of $4.00 per share of the Company’s common stock on June 4, 2015.
Prior to December 15, 2019, the Convertible Notes will be convertible
at the option of the holders of the Convertible Notes only upon the
satisfaction of certain conditions and during certain periods, and,
thereafter, at any time until the close of business on the business day
immediately preceding the maturity date. Upon conversion, the
Convertible Notes will be convertible into cash, shares of the
Company’s common stock (together with cash in lieu of fractional
shares) or a combination of cash and shares of the Company’s common
stock, at the Company’s election.
On or after June 15, 2018, the Company will have the right to redeem
the Convertible Notes for cash, in whole or in part, if the last
reported sale price per share of the Company’s common stock equals or
exceeds 140% of the then-current conversion price for a specified
period of time. The redemption price will equal 100% of the principal
amount of the Convertible Notes to be redeemed, plus accrued and unpaid
interest.
The offer and sale of the Convertible Notes and any shares of the
Company’s common stock that may be issued upon conversion of the
Convertible Notes have not been registered under the Securities Act of
1933 (the “Securities Act”) or any state securities laws and, unless so
registered, the Convertible Notes and any such shares may not be
offered or sold in the United States, except pursuant to an exemption
from the registration requirements of the Securities Act and applicable
state laws.
The gross proceeds from the offering will be $120 million. The Company
expects to use the gross proceeds from this offering to finance
proposed acquisitions of, or investments in, complementary businesses,
products, services and technologies, to pay fees and expenses related
to such proposed acquisitions and the offering, and for general
corporate purposes.
Targets Potential Acquisition Candidates, including DigiCore Holdings
Limited
The Company is currently engaged in negotiations with respect to
several contemplated acquisitions, including the Company’s proposed
acquisition of all of the issued ordinary shares of DigiCore Holdings
Limited, a South African company traded on the JSE Limited stock
exchange (“DigiCore”), at a proposed purchase price of 4.00 South
Africa Rand per share, or a total purchase price of approximately $80
million. DigiCore specializes in the research, development,
manufacturing, sales and marketing of telematics tools used for fleet
management and consumer and enterprise-level vehicle tracking for an
international client base. The Company believes that its acquisition of
DigiCore would establish the Company’s position as a lead player in the
global asset tracking and management market, and would provide
immediate top-line contribution and meaningful EBITDA contribution in
2016. More information about DigiCore is available on DigiCore’s
website at http://www.ctrack.com/ and in its public filings on the JSE
Limited’s Stock Exchange News Service at
https://www.jse.co.za/current-
ents. Information found on, or accessible through, such websites is not
a part of, and is not incorporated into, this press release.
Notwithstanding such negotiations, as of the date hereof, the parties
have not entered into any binding agreements with respect to any
proposed transaction. Although substantial due diligence has already
been conducted and a transaction agreement is being negotiated, neither
DigiCore nor the Company are under any obligation to enter into any
such agreement or to continue any such discussions and negotiations.
The Company cannot give any assurance that the parties will be able to
reach an agreement on the terms of any proposed transaction or reach an
agreement with respect to the terms and conditions to be contained in
any definitive agreement. The execution of any definitive agreement
would also be subject to the satisfactory completion of business,
technical, financial and legal due diligence. Even if the parties are
successful in entering into a definitive agreement, any transaction
would be subject to a number of conditions which would need to be
satisfied before such transaction could be consummated, including
foreign anti-competition and other regulatory approvals, approval by
the JSE Limited, approval by or acceptance of DigiCore’s stockholders
and the availability to the Company of sufficient funds to consummate
the transaction.