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CounterPath Corporation (NASDAQ:CPAH)(TSX:PATH) ("CounterPath" or the "Company"), a global provider of award-winning Unified Communications and Collaboration (UCC) solutions for enterprises and service providers, today announced that it has entered into a definitive Agreement and Plan of Merger (the "Merger Agreement") with Alianza, Inc. ("Alianza"), a leading cloud communications platform for service providers, pursuant to which Alianza has agreed to acquire CounterPath in an all-cash transaction (the "Transaction") for US$3.49 per share (the "Merger Consideration"), implying an approximate market value of US$25.7 million.
The Transaction, which was unanimously approved by CounterPath's board of directors (the "CounterPath Board"), represents a premium of approximately 26.3% to the closing price of CounterPath's common stock on the Nasdaq Capital Market on December 4, 2020, the last trading day prior to the Transaction announcement and a premium of approximately 27.4% to the prior 30 day average closing price of CounterPath's common stock on the Nasdaq Capital Market prior to the Transaction announcement.
"We are pleased to announce this transaction with Alianza, delivering immediate cash value to our shareholders at a premium," said David Karp, Chief Executive Officer of CounterPath. "Together, Alianza and CounterPath will deliver a complete communication and collaboration platform to our shared customer base. This transaction is a testament to the hard work and dedication of our talented team, and we are excited to join Alianza."
"The CounterPath Board, led by a special committee comprised of independent board members, conducted a thorough review of opportunities to enhance shareholder value. The CounterPath Board has unanimously concluded that entering into this agreement with Alianza represents the best way to maximize value for CounterPath's shareholders," said Terence Matthews, Chairman of the CounterPath Board. "This transaction with Alianza is an excellent outcome for CounterPath, and I thank David Karp and the rest of the management team for leading CounterPath to this critical point in CounterPath's history."
"Alianza and CounterPath share a common purpose to connect people and enrich lives and businesses via a rich communications experience. The combination of our two companies will further help service providers deliver on that vision," said Brian Beutler, Chief Executive Officer of Alianza. "Our respective customers will benefit from having a more robust suite of modern cloud communication services to increase their agility, scale and cost savings when deploying their own differentiated communications offerings for end users."
The Transaction has been approved by the boards of directors of both companies and is subject to customary closing conditions, including but not limited to (i) approval of the Merger Agreement by the holders of a majority of shares of common stock of CounterPath and by the holders of a majority of shares of common stock of CounterPath held by the minority stockholders as required by Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions adopted by certain Canadian securities regulators, (ii) receipt of all necessary regulatory approvals, and (iii) there not being dissenting shares representing more than 4% of the outstanding shares of common stock of CounterPath. The Transaction is expected to close in the first quarter of 2021.
As an inducement to the parties entering into the Merger Agreement, on December 6, 2020, certain stockholders of CounterPath, beneficially owning, in the aggregate, approximately 51.1% of the outstanding shares of common stock of CounterPath entered into a voting agreement, pursuant to which, among other things, such stockholders agreed to vote to approve the Merger Agreement and to take certain other actions in furtherance of the Transaction.
