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ISS - Apptix ASA Sells US Subsidiary & Operations

Company: Carasent Date: 2016-11-15 Language: English Register to download
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 Apptix ASA Sells US Subsidiary & Operations

# Apptix ASA Sells US Subsidiary & Operations

Herndon, VA and Oslo, Norway, November 15, 2016  

  

Apptix ASA, today announced it has sold Apptix, Inc.  

(the "Company"), its US-based subsidiary and operations  

to Fusion Telecommunications International Inc.  

("Fusion") (NASDAQ: FSNN), a leading cloud services  

provider delivering an integrated suite of advanced  

cloud communications, cloud connectivity, and cloud  

computing solutions to business customers nationwide.  

The transaction was valued at USD 28.0 million in cash  

and equity paid at closing, less net debt obligations,  

transaction fees and expenses.  

  

Sale of US Operations  

On November 14, 2016 Apptix ASA signed and closed a  

Stock Purchase Agreement ("SPA") with Fusion for the  

sale of the Company, its only subsidiary and business  

operations.  

  

Fusion is a leading provider of integrated cloud  

solutions to small, medium and large businesses.  

Fusion's advanced, proprietary service platform enables  

the integration of leading edge solutions in the cloud,  

including cloud voice and unified communications,  

contact center, cloud connectivity, cloud computing and  

additional cloud services such as storage and security.  

Fusion is listed on the NASDAQ Capital Market under  

ticker FSNN. The Company will be a wholly-owned  

subsidiary of Fusion and will be a major component of  

Fusion's cloud-based Business Services division.  

  

The Apptix/Fusion combination creates a business with  

about USD 145 million in annual revenues, substantial  

synergies in the form of cost savings, operational  

strength and diversified customer base, of which Apptix  

ASA shareholders will control 16.6% post transaction.  

  

"With the numerous initiatives we have undertaken since  

2014 and culminating with the Fusion transaction, we  

believe we have provided our shareholders with the best  

possible cash outcome along with an additional  

opportunity to participate in the future growth of  

Fusion with equity participation. We have great  

confidence in Fusion's strategy and its ability to  

create significant value. Importantly, the two companies  

share a common vision and culture which provides a great  

foundation for the integration of our teams," commented  

Johan Lindqvist, Chairman of Apptix ASA.  

  

Matthew Rosen, Fusion's Chief Executive Officer,  

said, "We are thrilled to announce our acquisition of  

Apptix, which continues Fusion's previously announced  

strategy to build a market leading portfolio of  

integrated cloud service offerings and to achieve  

greater scale through disciplined, targeted  

acquisitions. The addition of Apptix deepens Fusion's  

comprehensive service portfolio with a focus on  

extending these services to the desktop and IT  

infrastructure of our customers. I am especially pleased  

to further grow our team of seasoned, highly trained  

cloud technology professionals.  

  

"We have gotten to know the Apptix team well over the  

past several months and have been tremendously impressed  

with the company's business, its customer base, its  

cloud computing infrastructure, and its engineering and  

development capabilities. We firmly believe Apptix is a  

great strategic fit for Fusion and are excited about our  

company's next chapter of growth," Mr. Rosen concluded.  

  

Apptix ASA was paid USD 23.0 million in cash at closing  

(before any transaction related expenses). Apptix ASA  

also received a total of 2,997,926 shares of Fusion  

common stock representing 19.9% of the outstanding  

Fusion common stock immediately prior to closing and  

16.6% immediately following the close. Based on the  

weighted average stock price of the Fusion shares over  

the past 180 days, the aggregate equity consideration  

was valued at USD 5.0 million. The transaction was  

structured as a "debt-free, cash-free" deal whereby  

Apptix ASA retained the cash balances of the Company at  

closing of approximately USD 3.7 million. Apptix ASA  

was also required to satisfy any of the Company's  

outstanding funded debt obligations at closing which  

totaled approximately USD 7.1 million. Additionally,  

Apptix ASA incurred approximately USD 2.3 million in  

transaction related fees and expenses in connection with  

the transaction. There was no escrow adjustment pursuant  

to the transaction and all indemnifications along with  

representations & warranties expired with the closing.  

Apptix ASA will be receiving approximately USD 17.3  

million in net cash proceeds or approximately NOK 1.80  

per share. It is the Board of Directors' intention to  

distribute NOK 1.65 per share as a dividend in December  

2016.  

  

Of the total equity received by Apptix ASA, 50% of the  

shares, or 1,498,963 shares, were transferred to Apptix  

ASA at closing with the remaining 50%, or 1,498,963  

shares, being transferred to Apptix ASA upon the receipt  

of two state public utility regulatory commission  

approvals which are expected within the next 120 days.  

  

The Fusion shares received by Apptix ASA will be subject  

to Regulation 144 of the United States Securities Act of  

1934 restricting the sale of the Fusion stock for up to  

12 months following the closing date. Fusion has agreed  

to file a registration statement with the US Securities  

and Exchange Commission within 12 months of closing,  

making the shares freely tradable on the NASDAQ  

exchange. During this period of time, the shares will be  

held and owned by Apptix ASA.  

  

The Company's President and Chief Operating Officer will  

not remain with the Company post-transaction.  

  

Pacific Crest Securities, a division of KeyBanc Capital  

Markets, represented Apptix ASA and the Company in this  

transaction.  

  

Forward Looking Statements  

Matters discussed in this announcement may constitute  

forward-looking statements. Forward-looking statements  

are statements that are not historical facts and may be  

identified by words such  

as «believe», «expect», «anticipate», «strategy», «intend  

s», «estimate», «will», «may», «continue», «should» and  

similar expressions. The forward-looking statements in  

this release are based upon various assumptions, many of  

which are based, in turn, upon further assumptions.  

Although the Company believes that these assumptions  

were, or are, as the case may be, reasonable when made,  

these assumptions are inherently subject to significant  

known and unknown risks, uncertainties, contingencies  

and other important factors which are difficult or  

impossible to predict and are beyond the control of the  

Company or may be erroneous or turn out to be erroneous  

for other reasons. Actual events may differ  

significantly from any anticipated development due to a  

number of factors, including without limitation, changes  

in public sector investment levels, changes in the  

general economic, political and market conditions in the  

United States and other world markets, the Company's  

ability to attract, retain and motivate qualified  

personnel, changes in the Company's ability to engage in  

commercially acceptable acquisitions and strategic  

investments, and changes in laws and regulation and the  

potential impact of legal proceedings and actions. Such  

risks, uncertainties, contingencies and other important  

factors could cause actual events to differ materially  

from the expectations expressed or implied in this  

release by such forward-looking statements.  

  

The information, opinions and forward-looking statements  

contained in this announcement speak only as at its  

date, and are subject to change without notice. The  

Company does not undertake any obligation to review,  

update, confirm, or to release publicly any revisions to  

any forward-looking statements to reflect events that  

occur or circumstances that arise in relation to the  

content of this announcement. You should not place  

reliance on the forward-looking statements in this  

document.  

  

About Apptix  

Immediately prior to the aforementioned transaction,  

Apptix ASA (OSE: APP) was the premier provider of  

managed and hosted business communication,  

collaboration, compliance & security, and infrastructure  

solutions to mid-market and enterprise customers and  

blue chip channel partners. Apptix was a cloud services  

pioneer and had almost 400,000 users under contract  

around the world. Apptix's comprehensive portfolio of  

cloud solutions included Microsoft Azure, Microsoft  

Office 365, Microsoft Exchange, Microsoft SharePoint,  

Microsoft Lync, VoIP, Servers on Demand, Enterprise  

Backup, Disaster Recovery, File Sync & Share, and  

Virtual Desktops. Apptix services were delivered over a  

highly reliable network leveraging best-in-class  

technology, housed in SSAE 16-compliant data centers,  

and backed by US-based 24/7 support. For more  

information, visit www.apptix.com.  

  

For further information:  

  

Johan Lindqvist (Chairman)  

johan.lindqvist@windchange.se  

+46 733 55 09 35  

  

Christopher E. Mack (President & COO)  

chris.mack@apptix.com  

+1 703 890 2800