Security firm March Networks acquired by Chinese company for $90 million
by The CANADAN PRESS
Advanced surveillance technology company March Networks has agreed to a takeover by a China-listed company in a deal valued at $90 million.
OTTAWA—Advanced surveillance technology company March Networks has agreed to a takeover by a China-listed company in a deal valued at $90 million.
The Ottawa-based company would be acquired by Infinova (Canada) Ltd. and Shenzhen Infinova Ltd., a company listed on the Shenzhen Stock Exchange, for C$5 per share.
Shenzhen Infinova is majority owned by U.S. shareholders and has its U.S. headquarters in Monmouth Junction, N.J.
March Networks president and CEO Peter Strom said the transaction will create one of the 10 largest global players in the video surveillance industry and positions it for an expected consolidation of the industry over the next five years.
“Infinova offers March Networks a broader geographic footprint, access to the world’s fastest growing market and a complementary fit with our respective product lines,” said Strom.
Infinova chairman Jeffrey Liu said the acquisition provides scale in all critical markets, as well as access to March Network’s “…proven and innovative IP technology.”
March will continue to operate independently from its Ottawa headquarters, maintain its name and brands and deliver on all of its commitments to customers, while taking full advantage of Infinova’s manufacturing expertise and R&D scale, Liu said.
Under an agreement between the two sides, directors and senior officers of the company holding 22 per cent of March Network shares have agree to support the takeover, which required the approval of at least two thirds of shareholders as well as other approvals.
The arrangement also gives Infinova the right to match any superior proposal as well as the payment of a C$1.4-million termination fee by March Networks or a C$1.4-million breakup fee by Infinova if the arrangement is not completed in certain circumstances.
Infinova will finance the acquisition, expected to be completed in the fourth quarter of fiscal 2012, from available cash.
The takeover announcement came as March Networks said ongoing global woes drove a net loss of US$2.3 million on revenues of US$21.9 million, compared with a profit of US$1.2 million last year on revenues of US$27.5 million.
“The company believes that delays in order intake and revenue declines in the first half of fiscal 2012 were attributable to normal quarterly revenue volatility and the negative impact of the ongoing global macro-economic situation, particularly in the banking sector,” Strom said.