Digimarc’s ID Systems Business to be Acquired by L-1 Identity Solutions
Parties:
>L-1 Identity Solutions, Inc., together with its portfolio of companies, offers a comprehensive set of products and solutions for protecting and securing personal identities and assets.(http://www.L1ID.com)
>Digimarc Corporation, is a leading supplier of secure identity and media management solutions. (http://www.digimarc.com)
Digimarc stockholders will received $120 million divided by number of shares outstanding at closing.
A fraction of L-1 Identity Solutions Stock based on price of L-1 Identity Stock and shares outstanding at closing. Max shares of L-1 Identity to be received by Digimarc shareholders in total will be 11,300,000 shares. (see exchange ratio below)
Digimarc’s Digital Watermarking business, together with all of Digimarc’s cash, will, immediately prior to closing of the acquisition, be contributed to a wholly-owned subsidiary of Digimarc which will be distributed to Digimarc’s shareholders in a taxable spin-off transaction
>The Exchange Ratio shall be determined in the following manner based on L-1 Identity Stock price: (A) If the 20-Day Average Price is less than or equal to $14.00 (the “Cap Price”), and greater than or equal to $11.00 (the “Floor Price”),the Exchange Ratio shall be equal to a fraction:
(1) the numerator of which is 10,245,902; and
(2) the denominator of which is the number of shares of Company Common Stock issued and outstanding immediately prior to the Effective Time (after giving effect to any option exercises prior to the Spin-Off pursuant to Section 2.3 and the cancellation of any shares of Company Common Stock that are owned by the Company (as treasury stock or otherwise) in accordance with Section 2.1(b), such amount being the “Closing Date Company Share Number”).
(B) If the 20-Day Average Price is greater than the Cap Price, the Exchange Ratio shall be equal to a fraction:
(1) the numerator of which is the quotient obtained by dividing (x) $143,442,628 by (y) the Closing Date Company Share Number; and
(2) the denominator of which is the 20-Day Average Price.
(C) If the 20-Day Average Price is less than the Floor Price, the Exchange Ratio shall be equal to a fraction:
(1) the numerator of which is 11,300,000; and
(2) the denominator of which is the Closing Date Company Share Number;
provided, however, that notwithstanding anything in this Agreement to the contrary, Parent will not be obligated to issue more than 11,300,000 shares of Parent Common Stock as Merger Consideration.
