Endace welcomes takeover offer
The founders of New Zealand-born IT company Endace have shown support for a takeover offer from Emulex Corporation.
Listed on Britain's Aim junior sharemarket, Endace produces equipment used by the likes of telcos and universities to monitor vast amounts of traffic over broadband networks, for security and traffic management.
The company said the offer was priced at £5 a share, a 65 per cent premium to Endace's closing price yesterday, valuing the company at £80.7 million ($156.6 million).
Emulex said it had entered into a lock-up agreement with Endace co-founder and chairman Dr Ian Graham in respect of his 7.4 per cent shareholding.
The company said another Endace founder and 5.8 per cent shareholder, Selywn Pellet, had given an "expression of support" for the deal.
Endace said the offer was subject to conditions, which included 90 per cent take-up from investors. The company was originally spun out of Waikato University. It carries out most of its research and development in Hamilton and in Auckland, and manufacturers in Christchurch.
The offer has been welcomed by Endace's chief executive Mike Riley, who is also subject to a lock-up agreement for his 593,953 share options.
"The Endace team is excited to be joining forces with Emulex. Our companies share a common vision and have a strong cultural affinity. Together, we will create a new generation of network visibility solutions and take them to a global market," Riley said.
Endace's independent directors have recommended shareholders accept. Chairman John Scott said it was a compelling offer.
Two other director-shareholders have given commitment letters to Emulex in respect of a total of just under 3 per cent of Endace's shares.
Emulex said it intended maintaining Endace's offices in New Zealand and would promote it base here as an "International Centre of Excellence for ongoing research and development into Intelligent Network Monitoring and Recording".
An offer document is expected to be dispatched to shareholders on December 21.