Norsat enters into definitive agreement with Hytera to be acquired for US$10.25 per share

Norsat International Inc., a provider of unique and customized communication solutions for remote and challenging applications, today announced that it has entered into an arrangement agreement with Hytera Project Corp., a subsidiary of Hytera Communications Co., Ltd. pursuant to which Hytera will acquire all the issued and outstanding shares of Norsat for $10.25 in United States dollars in cash per share, pursuant to a court-approved plan of arrangement. All unexercised options and restricted share units will also be acquired under the Arrangement. The proposed transaction values Norsat at an equity value of approximately $62 million USD.

As previously disclosed by Norsat on March 17, 2017, Privet Fund Management LLP submitted a non-binding letter of interest to acquire the Company for cash consideration of $10.25 USD per share subject to due diligence, financing, the completion of a definitive agreement and other conditions. At that time, Norsat and Hytera were in exclusivity with respect to a possible transaction. Based on Hytera’s offer of the same cash consideration as indicated in Privet’s non-binding letter of interest, with no further due diligence, no financing conditions and the synergies between Norsat and Hytera including but not limited to a greater global sales presence, access to additional markets and research and development collaboration, the Independent Directors of Norsat’s Board of Directors (the “Board”) decided to proceed with the Arrangement Agreement.

“After discussions with multiple parties and a comprehensive review of several indications of interest with respect to a strategic transaction, we are very pleased to have reached an agreement with Hytera. We believe this all-cash transaction offers Norsat shareholders immediate liquidity and certainty of value. We thank our shareholders for their patience and support during the strategic review, a process that has ultimately surfaced significant value for all Norsat shareholders,” said Fabio Doninelli, Director and Chairman of the Board.

Cash Consideration and Attractive Premium – Under the Arrangement, shareholders of Norsat will receive $10.25 USD per Norsat share in cash, offering immediate liquidity and certainty of consideration. The cash consideration per share represents a premium of 62% over the unaffected trading price of the shares on the Toronto Stock Exchange, on September 16, 2016, the last trading day prior to the announcement on September 19, 2016 by Privet, a shareholder of Norsat of its interest in acquiring Norsat. The Arrangement also represents a premium of 66% over the 20-day VWAP on the Toronto Stock Exchange ending on September 16, 2016.

Independent Directors Support and Approval –The Independent Directors have unanimously determined that the Arrangement is in the best interests of Norsat and its shareholders. The Board has received opinions from its financial advisor, Raymond James Ltd., and from KPMG LLP, an independent advisor, that as of March 24, 2017 and subject to the assumptions, limitations and qualifications set forth herein, the consideration to be received by shareholders of Norsat pursuant to the Arrangement Agreement is fair, from a financial point of view, to shareholders of Norsat (the “Fairness Opinions”).

Details of the Arrangement and Required Approvals – The Arrangement will be subject to a number of customary conditions, including the approval of Norsat shareholders and certain regulatory approvals including under the Investment Canada Act.

The Arrangement will be considered by shareholders at an upcoming special meeting and will require the approval of at least 66 2/3% of the votes cast by shareholders at the meeting. If approved by shareholders, and subject to the receipt of all required regulatory approvals, the transaction is expected to close in the second quarter of 2017. Shareholders are encouraged to review the detailed information to be contained in the management information circular that is expected to be mailed to shareholders in the coming weeks. The management information circular, a copy of the arrangement agreement, the plan of arrangement, and related documents will be filed with Canadian and United States securities regulators and will be available on SEDAR at and on EDGAR at

The Arrangement Agreement provides for, among other things, customary non-solicitation provisions, with “fiduciary out” provisions that allow Norsat to terminate the Arrangement Agreement to accept an unsolicited superior proposal in certain circumstances, subject to payment of a termination fee of $2.0 million USD and subject to the right of Hytera to match the superior proposal in question.

The transaction is not subject to obtaining financing commitments.


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