Optiva to be acquired by Qvantel for 25 cents per share

Executive Summary

• Qvantel will acquire all outstanding Optiva common shares and cancel $108.6 M of senior secured PIK toggle notes, completing a strategic business combination.
• Shareholders will receive CAD 0.25 per Optiva share plus an exchange of debt for Qvantel voting shares (≈22.4% post‑closing), new senior secured notes ($25 M), warrants (3% of post‑closing Qvantel equity) and possible cash adjustments up to $700 k.
• The transaction is expected to close in December 2025, after which Optiva will be delisted from the Toronto Stock Exchange and cease reporting under Canadian securities law.

Key Details

• Transaction Structure: Statutory plan of arrangement under Canada Business Corporations Act; subject to court approval, shareholder and noteholder votes, and customary closing conditions.
• Cash Consideration: CAD 0.25 per Optiva share paid to shareholders at closing.
• Debt Exchange for Noteholders:
• Voting shares of Qvantel at a ratio of 102.236 Qvantel shares per US$1,000 principal amount of PIK notes (≈22.4% of post‑closing Qvantel equity).
• New senior secured notes issued by Qvantel with aggregate principal amount of US$25 M (subject to adjustments).
• Warrants to purchase additional Qvantel shares equal to 3% of outstanding Qvantel shares on a post‑closing basis.
• Potential cash payment at closing if Optiva has surplus cash above a specified target.
• Deferred cash payment up to US$700 k payable post‑closing based on collection of surplus accounts receivable, prorated among noteholders.
• Voting Support Agreements:
• Approximately 67.0% of Optiva shares and 83.5% of PIK notes are pledged to vote in favour of the transaction.
• EdgePoint holds ~29.1% of Optiva shares and ~74.7% of PIK notes; its support agreement terminates only upon closing or ten days after the arrangement’s outside date.
• About 67.7% of Qvantel shares are pledged to vote in favour.
• Deal Protections: Non‑solicitation covenants, fiduciary‑out provisions for Optiva, right‑to‑match for Qvantel, and a US$5 M termination fee payable by Optiva if it accepts a superior proposal.
• Board Recommendations: Unanimous recommendation from Optiva’s board and special committee that the transaction is fair and in shareholders’ best interests; Raymond James opinion supports fairness of consideration.
• Regulatory & Minority Approval: Transaction qualifies as a “business combination” under MI 61‑101, requiring majority approval of minority shareholders. Optiva relies on arm’s‑length negotiations exemption for formal valuation.
• Closing Timeline: Anticipated completion in December 2025; shareholder and noteholder meetings expected late November or early December 2025.
• Post‑Closing Effects: Optiva shares to be delisted from the TSX; Optiva will cease to be a reporting issuer under Canadian securities laws.

Notable Quotes

• “This marks the opening of an exciting journey to drive innovation, business success and inspiration… the combination … is set to lead the next evolution of BSS and monetization in the AI era.” – Matti Roto, CEO & Chairman, Qvantel
• “We are excited about the new chapter, which provides a strong foundation to drive innovation, advance sustainable development and empower our customers’ long‑term success.” – Robert Stabile, CEO, Optiva

Materiality: Material – Positive (significant corporate restructuring with substantial shareholder consideration and strategic impact).