Shareholders to Consider Plan of Arrangement for Acquisition of ComnetiX
TORONTO, Dec. 18 /CNW/ - ComnetiX(TM) Inc. (TSX:CXI), a leading provider of integrated biometric identification and authentication solutions, announced that the Ontario Superior Court of Justice today granted an interim order providing for a special meeting of shareholders of ComnetiX to be held on January 19, 2007, for the purpose of considering an arrangement under section 192 of the Canada Business Corporations Act involving ComnetiX, its shareholders and warrantholders, 6653375 Canada Inc. and L-1 Identity Solutions, Inc. The Arrangement provides for the acquisition by L-1 of all of the outstanding common shares of ComnetiX for US$0.82 in cash per share (subject to adjustment as described in the Management Information Circular of ComnetiX) and the acquisition by ComnetiX of all its outstanding warrants for $0.03 in cash per warrant. A Management Information Circular relating to the special shareholders' meeting will be mailed to ComnetiX shareholders and warrantholders shortly and will be available on SEDAR at www.sedar.com. The record date for the shareholders' meeting is December 11, 2006.
The Board of Directors of ComnetiX has unanimously approved the Arrangement and has determined that the Arrangement is fair to, and in the best interests of, ComnetiX's shareholders and warrantholders.
In making this determination, the Board of Directors of ComnetiX relied in part on a fairness opinion from Wellington West Capital Markets Inc. In its fairness opinion, Wellington West concluded that, as of November 15, 2006, the consideration to be received by ComnetiX shareholders pursuant to the Arrangement is fair to them from a financial point of view.
In reaching its conclusion that the Arrangement is in the best interest of ComnetiX, its shareholders and warrantholders, the Board of Directors also considered that the amount of US$0.82 to be received by shareholders for each common share under the Arrangement represents a premium of approximately 95% over the closing price of the common shares of ComnetiX on the Toronto Stock Exchange on November 14, 2006, the last trading day prior to the announcement of the Arrangement.
Bernard W. Crotty, Chairman and CEO of ComnetiX, stated "The board of directors has unanimously approved the Arrangement and determined that the transaction is in the best interests of ComnetiX and its shareholders. The purchase price to be paid by L-1 is nearly double the price of our shares before the announcement of the Arrangement."
All of the directors and executive officers of ComnetiX have entered into irrevocable agreements to vote in favor of the Arrangement and the reduction of the stated capital described below. The directors and officers hold in the aggregate approximately 31 % of the outstanding common shares of ComnetiX.
The Arrangement Agreement entered into by ComnetiX and L-1 provides that ComnetiX is required to pay to L-1 a termination fee of approximately US $625,000 and an additional US $500,000 as a reimbursement of L-1's expenses if the Arrangement agreement is terminated in certain circumstances, including if the Arrangement is not approved by at least two-thirds of the votes cast by shareholders at the special meeting, or if holders of 7.5% or more of the outstanding common shares exercise their dissent rights under the Canada Business Corporations Act.
At the meeting, shareholders will be asked to vote on the appointment of auditors, the election of directors, a special resolution approving the Arrangement and a related special resolution approving a reduction in the stated capital of ComnetiX.
About ComnetiX(TM) Inc (www.ComnetiX.com)
ComnetiX(TM) Inc provides secure identification and authentication solutions to both the public and private sectors throughout North America. ComnetiX offers multimode biometric identification solutions for use in areas such as applicant screening, financial services, health care, transportation, airlines and airports, casinos and gaming, and energy and utilities. Clients include American Airlines, Lehman Brothers, New York City Health and Hospital Corporation, New York State Division of Criminal Justice Services, Toronto Police Services Board, Boston Police Department and the Royal Canadian Mounted Police. ComnetiX is also Canada's premier applicant fingerprinting services company, facilitating tens of thousands of criminal background checks each year through its chain of ten offices across Canada. In addition, ComnetiX has established more than 40 applicant fingerprinting services locations throughout the United States.
About L-1 Identity Solutions
L-1 Identity Solutions, Inc. (NYSE: ID) consists of, among other businesses, the historic operations of Viisage Technology, Inc. and Identix Incorporated, which merged on August 29, 2006. L-1 Identity Solutions, together with its portfolio of companies, offers a comprehensive set of products and solutions for protecting and securing personal identities and assets. Leveraging the industry's most advanced multi-modal biometric platform for finger, face and iris recognition, our solutions provide a circle of trust around all aspects of an identity and the credentials assigned to it -- including proofing, enrollment, issuance and usage. With the trust and confidence in individual identities provided by L-1 Identity Solutions, government entities, law enforcement and border management agencies, and commercial enterprises can better guard the public against global terrorism, crime and identity theft fostered by fraudulent identity. L-1 Identity Solutions is headquartered in Stamford, CT. For more information, visit www.L1ID.com.
Statements made in this news release that relate to future plans, events or performances are forward-looking statements. Any statement in this release containing words such as "believes," "plans," "expects" or "intends" and other statements that are not historical facts are forward-looking, and these statements involve risks and uncertainties and are based on current expectations. Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements.