News Room

Magnet Forensics Shareholders Approve Plan of Arrangement with Thoma Bravo


Magnet Forensics Inc. (the “Company” or “Magnet”) (TSX: MAGT), a developer of digital investigation solutions for enterprises and public safety organizations, is pleased to announce that at the Company’s special meeting of shareholders held on March 23, 2023 (the “Meeting”), shareholders approved the previously announced plan of arrangement (the “Arrangement”) with Morpheus Purchaser Inc. (the “Purchaser”), a newly created corporation controlled by Thoma Bravo, a leading software investment firm, whereby the Purchaser will acquire all of the issued and outstanding subordinate voting shares (“SV Shares”) and multiple voting shares (“MV Shares” and together with the SV Shares, the “Shares”) of the Company, subject to the terms and conditions of the definitive arrangement agreement entered into on January 20, 2023 (the “Arrangement Agreement”).

Pursuant to the Arrangement Agreement, the Purchaser will, among other things, acquire (i) all of the SV Shares for a cash payment of CA$44.25 per Share, other than those held by the Rolling Shareholders1, (ii) all the Shares (other than the Rollover Shares2) held by the Rolling Shareholders for a cash payment of CA$39.00 per Share and (iii) the Rollover Shares which will be exchanged for shares of the Purchaser at an implied value of CA$39.00 per Share.

The transaction is to be completed by way of a plan of arrangement under the Business Corporations Act (Ontario) and will constitute a “business combination” for purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Arrangement was subject to certain shareholder approvals at the Meeting, including the affirmative vote of: (i) at least two-thirds of the votes cast by holders of SV Shares and MV Shares, voting together as a single class; (ii) at least a simple majority of the votes cast by holders of MV Shares; (iii) at least a simple majority of the votes cast by holders of SV Shares; and (iv) at least a simple majority of the votes cast by holders of SV Shares, after excluding those votes attached to SV Shares held by shareholders required to be excluded pursuant to MI 61-101, in each case, with each SV Share entitled to one vote and each MV Share entitled to ten votes during the Meeting.

The detailed voting results to approve the Arrangement were as follows:

  • A total of 298,346,306 votes were cast by holders of SV Shares and MV Shares, voting together as a single class. Of the votes cast, 295,381,644 or 99.01% voted in favour of the special resolution approving the Arrangement.
  • A total of 289,033,030 votes were cast by holders of MV Shares. Of the votes cast, 289,033,030 or 100% voted in favour of the special resolution approving the Arrangement.
  • A total of 9,313,276 votes were cast by holders of SV Shares. Of the votes cast, 6,348,614 or 68.17% voted in favour of the special resolution approving the Arrangement.
  • A total of 8,943,622 votes were cast by holders of SV Shares, after excluding those votes attached to SV Shares held by shareholders required to be excluded pursuant to MI 61-101. Of the votes cast, 5,978,906 or 66.85% voted in favour of the special resolution approving the Arrangement.

Magnet’s full report of voting results will be filed under Magnet’s issuer profile at www.sedar.com.

Completion of the transaction is subject to receipt of a final order from the Ontario Superior Court of Justice (Commercial List) and other customary conditions, with the final order hearing expected to be held on March 27, 2023. The closing conditions in respect of the applicable regulatory approvals, being clearance under the UK NSI Act, expiry of the limitation period for national security review under the Investment Canada Act as well as the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, have now been satisfied. Assuming that all conditions to closing of the Arrangement are satisfied or waived, the Arrangement is expected to become effective in early April 2023.

Registered shareholders of Magnet must submit a duly completed Letter of Transmittal and the share certificate(s) representing their Shares, as applicable, to Computershare Investor Services Inc. (“Computershare”), the Company’s depositary, in order to receive the cash consideration following closing of the Arrangement. If you have any questions or require further information about the procedures to complete your Letter of Transmittal, please contact Computershare at 1‑800‑564-6253 (toll-free within North America) or by email at corporateactions@computershare.com.

Please refer to the Company’s management information circulated dated February 16, 2023 filed on SEDAR at www.sedar.com and available on the Company’s website at www.magnetforensics.com. All information contained herein is qualified by reference thereto.

All dollar amounts set forth in this press release are in Canadian dollars unless stated otherwise.

About Magnet Forensics

Founded in 2010, Magnet Forensics is a developer of digital investigation software that acquires, analyzes, reports on, and manages evidence from digital sources, including computers, mobile devices, IoT devices and cloud services. Magnet Forensics’ software is used by more than 4,000 public and private sector customers in over 100 countries and helps investigators fight crime, protect assets and guard national security.

Cautionary Note Regarding Forward-Looking Information

This press release contains “forward-looking information” and “forward-looking statements” (collectively, “FLS”) within the meaning of applicable securities laws. Such FLS are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Any such FLS may be identified by words such as “proposed”, “expects”, “intends”, “may”, “will”, and similar expressions. FLS contained or referred to in this press release includes, but is not limited to, statements regarding the Arrangement, including the timing of the final order hearing and closing of the Arrangement.

FLS is based on a number of factors and assumptions which have been used to develop such statements and information, but which may prove to be incorrect. Although the Company believes that the expectations reflected in such FLS are reasonable, undue reliance should not be placed on FLS because the Company can give no assurance that such expectations will prove to be correct. Factors that could cause actual results to differ materially from those described in such FLS include, without limitation, the following factors, many of which are beyond the Company’s control and the effects of which can be difficult to predict: (a) the possibility that the Arrangement will not be completed on the terms and conditions, or on the timing, currently contemplated, and that it may not be completed at all, due to a failure to obtain or satisfy, in a timely manner or otherwise, Court and other conditions of closing necessary to complete the Arrangement or for other reasons; (b) risks related to tax matters; (c) the possibility of adverse reactions or changes in business relationships resulting from the announcement or completion of the Arrangement; (d) risks relating to the Company’s ability to retain and attract key personnel during and following the period ending with the consummation of the Arrangement; (e) the possibility of litigation relating to the Arrangement; (f) credit, market, currency, operational, liquidity and funding risks generally and relating specifically to the Arrangement, including changes in economic conditions, interest rates or tax rates; (g) business, operational and financial risks and uncertainties relating to the COVID-19 pandemic; (h) risks related to the Company resulting from the combination of the Company and Grayshift, LLC in retaining existing customers and attracting new customers, retaining key personnel, executing on growth strategies, advancing its product line and protecting its intellectual property rights and proprietary information; (i) risks related to the Company’s ability to prevent unauthorized access to or disclosure, loss, destruction or modification of data, through cybersecurity breaches or computer viruses disrupting the functionality of the Company’s products; (j) the impact of competition; (k) changes and trends in the Company’s industry and the global economy; and (l) the identified risk factors included in the Company’s public disclosure, including the annual information form dated March 8, 2023, which is available on SEDAR at www.sedar.com and on the Company’s website at www.magnetforensics.com. If any of these risks or uncertainties materialize, or if the assumptions underlying the FLS prove incorrect, actual results or future events might vary materially from those anticipated in the FLS. Although the Company has attempted to identify important risk factors that could cause actual results to differ materially from those contained in FLS, there may be other risk factors not presently known to the Company or that the Company presently believe are not material that could also cause actual results or future events to differ materially from those expressed in such FLS. The FLS in this press release reflect the current expectations, assumptions, judgements and/or beliefs of the Company based on information currently available to the Company, and are subject to change without notice.

Any FLS speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any FLS, whether as a result of new information, future events or results or otherwise, except as required under applicable securities laws. The FLS contained in this press release are expressly qualified by this cautionary statement. For more information on the Company, please review the Company’s continuous disclosure filings that are available at www.sedar.com.

No securities regulatory authority has either approved or disapproved of the contents of this news release. The TSX accepts no responsibility for the adequacy or accuracy of this release.

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1 “Rolling Shareholders” means Jad Saliba, Director, President and Chief Technology Officer of the Company, Adam Belsher, Director and Chief Executive Officer of the Company, and Jim Balsillie, Chair of the board of directors of the Company, and their respective associates and affiliates.

2 “Rollover Shares” means 55% of the Shares held by the Rolling Shareholders.


For additional information from Magnet:

Neil Desai

Email: PR@magnetforensics.com

Website: www.magnetforensics.com

2220 University Avenue East

Suite 300

Waterloo, Ontario

N2K 0A8

Media:

Riyaz Lalani & Dan Gagnier

Gagnier Communications

(416) 305-1459

magnet@gagnierfc.com

Source: Magnet Forensics