Satixfy Communications, MDA Space announce amended merger agreement

MDA Space (MDALF) and SatixFy Communications (SATX) announced that they have agreed to amend the terms of the Agreement and Plan of Merger, dated April 1, among SatixFy Communications, MDA Space and certain subsidiaries, pursuant to which MDA agreed to acquire SatixFy in an all-cash transaction for $2.10 per ordinary share, which implied an aggregate equity value for the Company of approximately $193M. The amendment follows a go-shop process, conducted by SatixFy with the assistance of its financial advisor TD Securities, in which approximately 75 third parties were contacted to determine whether they had an interest in making an Acquisition Proposal. The “go-shop” period under the Merger Agreement expired at 11:59 p.m. ET on May 16. As a result of this process, SatixFy received during the “go-shop” period an Acquisition Proposal from a third-party to acquire all of the outstanding shares of SatixFy in an all-stock transaction, consisting of a number of the Go-Shop Party’s shares that would imply aggregate equity consideration of approximately $233.5M, or approximately $2.53 per ordinary share. Furthermore, the exchange ratio, on the basis of which the consideration pursuant to the Go-Shop Proposal would be calculated, featured a collar such that the ratio between the SatixFy shares and the Go-Shop Party stock consideration would remain fixed despite any increase in the Go-Shop Party’s trading price to enable the holders of SatixFy’s ordinary shares to participate in up to a 10% increase, and would be adjusted in the event of any decrease in the Go-Shop Party’s trading price to enable the holders to receive the same aggregate value of $233.5M despite up to a 20% decrease. MDA disputed the validity of SatixFy’s notice of the Acquisition Proposal. In response to the Go-Shop Proposal and subsequent discussions with MDA, SatixFy and MDA reached an agreement to amend the Merger Agreement to provide for a significant increase in the merger consideration to an all-cash transaction for $3.00 per ordinary share, which implies an aggregate equity value for the Company of approximately $280M. The increase in the merger consideration is based upon the commitment by the Company not to consider any other acquisition proposals for SatixFy and for SatixFy’s Board of Directors not to change its recommendation supporting the Merger Agreement, as amended. The Board determined that the increased price per share is the best value for the shareholders of Satixfy, after taking into account various considerations including time to close and risks of delays, risks to closing, financial situation of the company, benefits of an all-cash transaction and others. The Board unanimously reiterates its recommendation that SatixFy shareholders vote FOR the revised transaction at the Meeting. Shareholders holding approximately 57% of SatixFy outstanding shares have entered into voting support agreements pursuant to which they have committed to vote in favor of the transaction. In connection with the Board Determination, the Board also resolved that the upcoming Special General Meeting of Shareholders to approve the Merger Agreement and related transactions which was scheduled for May 20 will be postponed to 4:00 p.m. Israel time on May 23 to allow sufficient time under applicable laws, rules and regulations for the announcement and distribution of the disclosures set forth herein.