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Norsat Notifies Hytera of Superior Proposal from Privet Fund Management LLC

Press Release From: Norsat International Inc.
Posted: Tuesday, June 13, 2017

Norsat International Inc. (“Norsat” or the “Company”) (TSX: NII and NYSE MKT: NSAT), a provider of unique and customized communication solutions for remote and challenging applications, today announced that the Special Committee comprising all of the Independent Directors of the Board of Directors, in consultation with the Company’s legal and financial advisors, have reviewed and considered an updated unsolicited proposal from Privet Fund Management LLC (“Privet”) to acquire the Company for cash consideration of US$11.50 per share (the “Privet Subsequent Acquisition Proposal”).  Privet has indicated that it is prepared to sign a definitive agreement on non-financial terms and conditions substantially identical to the existing arrangement and amending agreement with Hytera (the “Amended Arrangement Agreement”) but with an increase to the mutual termination fees from US$2.5 million to US$3.0 million. The Independent Directors have determined that the Privet Subsequent Acquisition Proposal constitutes a “Superior Proposal” as defined in the Amended Arrangement Agreement. 

Norsat has delivered written notice to Hytera of the determination of the Independent Directors.   Hytera now has a period of five business days (the “Right to Match Period”) to offer to amend the terms of the Amended Arrangement Agreement.  Hytera is under no obligation to make such an offer, but if they offer to amend the Amended Arrangement Agreement and the Independent Directors determine that the proposal of Privet ceases to be a Superior Proposal, Norsat will enter into a further amendment of the Amended Arrangement Agreement and implement the amended offer.  If Hytera does not offer to amend the Amended Arrangement Agreement, or offers to amend but the Privet Proposal remains a Superior Proposal, Norsat intends to accept the Privet Proposal and enter into a definitve agreement, terminate the Amended Arrangement Agreement and pay Hytera the termination fee of US$2.5 million, all in accordance with the terms of the Amended Arrangement Agreement.  However, a definitive agreement with Privet can only be executed by Norsat after approval from the Industrial Technologies Office representing the Strategic Aerospace and Defence Initiative program. Further, any transaction with Privet would be subject to shareholder and all required regulatory approvals.

The Right to Match Period expires on June 20, 2017.

At this time, there can be no assurance that the Privet Subsequent Acquisition Proposal will lead to the termination of the Amended Arrangement Agreement and the execution of a definitive agreement with Privet, or that the transaction contemplated by the Privet Proposal will obtain all necessary approvals or be consummated.

The Independent Directors recommend shareholders take NO action at this time and await further communication from Norsat.

About Norsat International Inc.

Founded in 1977, Norsat International Inc. is a provider of unique and customized communication solutions for remote and challenging applications. Norsat’s products and services include leading-edge product design and development, production, distribution and infield support and service of fly-away satellite terminals, microwave components, antennas, Radio Frequency (RF) conditioning products, maritime based satellite terminals and remote network connectivity solutions. More information is available at www.norsat.com, via email at investor@norsat.com or by phone at 1-604-821-2800. 

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