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Sterling Partners acquires Mosaid

by Lou Whiteman  |  Published October 28, 2011 at 11:20 AM
MosaidTechnologies_227x128.jpgCanadian patent licensing company Mosaid Technologies Inc., the subject of a hostile takeover bid, agreed late Thursday, Oct. 27, to be acquired by private equity firm Sterling Partners for C$590 million ($596 million) in cash.

The offer trumps a C$532 million offer from Wi-Lan Inc. that Mosaid rejected earlier this month. Terms of the transaction call for Sterling to pay C$46 per share in cash for Ottawa-based Mosaid, a premium of 9.5% over Wi-Lan's C$42 per share offer and more than 45% over the company's trading price in August prior to Wi-Lan going public with its bid.

Mosaid said its board was unanimously backing the Sterling offer, which also received a positive fairness opinion from Barclays Capital Canada Inc. and GMP Securities LP. The deal is the culmination of a strategic review Mosaid initiated in August after Wi-Lan, which is also based in Ottawa, first went public with a bid then worth C$38 per share, later raised to C$42.

The company said that during the review its advisers contacted more than 35 parties to discuss deals, entering into confidentiality and standstill agreements with 12 interested parties and holding discussions with multiple suitors before agreeing to the Sterling deal.

Wi-Lan offered no comment Friday morning. The company said its C$42 bid was its best and final offer, but the deal between Mosaid and Sterling allows an opportunity for other bidders to get involved.

The Sterling deal includes a nonsolicitation covenant and grants Sterling a right to match any superior bid, and also carries a C$22 million breakup fee payable to Northbrook, Ill.-based Sterling if the deal is not completed under certain specified circumstances.

In addition to Barclays and GMP, Mosaid was advised by LaBarge Weinstein PC, with Davies Ward Phillips & Vineberg LLP serving as legal counsel to a special committee of Mosaid directors. Sterling was advised by RBC Capital Markets and Osler, Hoskin & Harcourt LLP.

Wi-Lan retained Canaccord Genuity Corp., CIBC World Markets Inc. and Paradigm Capital Inc. for financial advice and Torys LLP for legal counsel.
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Tags: M&A | Mosaid Technologies Inc. | private equity | Sterling Partners

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