MOUNTAIN VIEW, Calif.--(Business Wire)--
SumTotal Systems, Inc. (NASDAQ: SUMT), the market leader and a global provider
of talent development solutions, today announced that its Board of Directors has
determined that a revised proposal received today from Vista Equity Partners
("Vista Equity") to acquire all of the outstanding shares of SumTotal common
stock for $4.85 per share in cash is a superior proposal, as defined in
SumTotal`s merger agreement with Accel-KKR, as amended on May 19, 2009 (the
"Amended Accel-KKR Agreement"). In accordance with the terms of the Amended
Accel-KKR Agreement, SumTotal has delivered notice to Accel-KKR of the Board`s
determination.
Under the terms of the Amended Accel-KKR Agreement, SumTotal is obligated to
negotiate in good faith with Accel-KKR for a period of three business days
(through May 26, 2009) to make adjustments to the terms and conditions of the
merger agreement. As previously announced on May 19, 2009, SumTotal and
Accel-KKR entered into an amended definitive merger agreement under which
Accel-KKR would acquire all of the outstanding shares of SumTotal common stock
for $4.80 per share in cash. In accordance with the Amended Accel-KKR Agreement,
SumTotal would be required to pay a fee of $6.67 million to Accel-KKR in order
to accept a superior proposal from any other party, including Vista Equity (the
"termination fee"). SumTotal noted that the termination fee under Vista Equity`s
proposal as initially announced on May 13, 2009 and revised on May 20, 2009 is
the same amount as the termination fee in the Amended Accel-KKR Agreement.
Under the terms of Vista Equity`s revised proposal, Vista Equity would acquire
all of the outstanding shares of SumTotal common stock for $4.85 per share in
cash. In addition, if SumTotal were to enter into the merger agreement proposed
by Vista Equity following the three business day negotiation period, SumTotal
would be required to pay a fee of $6.67 million to Vista Equity in order to
accept a superior proposal from any other party. Vista Equity`s revised proposal
also contemplates an increase in the consideration payable to SumTotal
stockholders to up to $4.95 per share in cash in the event of the invalidation
or reduction of the termination fee SumTotal is required to pay Accel-KKR in
accordance with the terms of the Amended Accel-KKR Agreement. SumTotal noted
that it considers the Amended Accel-KKR Agreement to be a binding obligation of
SumTotal and that Accel-KKR has indicated to SumTotal that it is not willing to
reduce the termination fee payable to Accel-KKR under the Amended Accel-KKR
Agreement, and that stockholders should therefore expect the current Vista
Equity proposal to be $4.85 per share in cash.
SumTotal`s Board is not withdrawing, amending, qualifying or modifying its
recommendation with respect to the Amended Accel-KKR agreement and is not making
any recommendation at this time with respect to the revised Vista Equity
proposal. There can be no assurance a transaction with Vista Equity will result.
RBC Capital Markets Corporation is acting as financial advisor to the Board of
SumTotal, and Wilson Sonsini Goodrich & Rosati, Professional Corporation, is
acting as SumTotal`s legal advisor.
ABOUT SUMTOTAL SYSTEMS, INC.
SumTotal Systems, Inc. (NASDAQ: SUMT) is the market leader and a global provider
of talent development solutions. SumTotal deploys mission-critical solutions
designed to drive learning, align goals, develop skills, assess performance,
plan for succession and set compensation. SumTotal`s solutions aim to accelerate
performance and profits for more than 1,500 companies and governments of all
sizes, including six of the world`s 10 biggest pharmaceutical makers, six of the
10 largest automotive companies in the world, four of the five branches of the
U.S. Armed Forces, three of the world`s top five airlines, five of the six
largest U.S. commercial banks and two of the world`s top five specialty
retailers. Mountain View, CA-based SumTotal has offices across Asia, Australia,
Europe and North America. For more information about SumTotal`s products and
services, visit www.sumtotalsystems.com.
SumTotal and the SumTotal logo are registered trademarks or trademarks of
SumTotal Systems, Inc. and/or its affiliates in the United States and/or other
countries. Other names may be trademarks of their respective owners.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. These statements are based on management`s current expectations and
beliefs and are subject to a number of factors and uncertainties that could
cause actual results to differ materially from those described in the
forward-looking statements. The forward-looking statements contained in this
document include statements concerning the proposed transaction with Accel-KKR,
including SumTotal`s ability to solicit alternative transactions and the
termination fee payable in the event that SumTotal accepts a superior proposal,
as well as statements regarding the Vista Equity proposal and its terms. These
statements are not guarantees of future performance, involve certain risks,
uncertainties and assumptions that are difficult to predict, and are based upon
assumptions as to future events that may not prove accurate. Therefore, actual
outcomes and results may differ materially from what is expressed herein. The
following factors, among others, could cause actual results to differ materially
from those described in the forward-looking statements: risks associated with
uncertainty as to whether any transaction will be completed, costs and potential
litigation associated with a transaction, the failure to obtain SumTotal`s
stockholder approval as may be required to consummate a transaction, the failure
to meet the closing conditions, the extent and timing of regulatory approvals
necessary to consummate a transaction and the risk factors discussed from time
to time by the company in reports filed with the Securities and Exchange
Commission. We urge you to carefully consider the risks which are described in
SumTotal`s Annual Report on Form 10-K for the year ended December 31, 2008 and
in SumTotal`s other SEC filings. SumTotal is under no obligation to (and
expressly disclaims any such obligation to) update or alter its forward-looking
statements whether as a result of new information, future events, or otherwise.
Additional Information and Where You Can Find It
In connection with the proposed transaction with affiliates of Accel-KKR,
SumTotal filed a preliminary proxy statement concerning the proposed transaction
with the SEC on May 4, 2009. Investors and security holders of SumTotal are
urged to read the proxy statement and any amendments thereto as well as any
other relevant documents filed with the SEC when they become available because
they will contain important information about SumTotal and the proposed
transaction with Accel-KKR. The definitive proxy statement (when it becomes
available) will be mailed to SumTotal stockholders. The proxy statement and any
other documents filed by SumTotal with the SEC may be obtained free of charge at
the SEC`s web site at www.sec.gov. In addition, investors and security holders
may obtain free copies of the documents filed with the SEC by SumTotal by
contacting SumTotal Investor Relations at 650-934-9584. Investors and security
holders are urged to read the proxy statement and the other relevant materials
when they become available before making any voting or investment decision with
respect to the proposed transaction.
SumTotal and its directors, executive officers and certain other members of its
management and employees may, under SEC rules, be deemed to be participants in
the solicitation of proxies from SumTotal`s stockholders in connection with the
proposed transaction with affiliates of Accel-KKR. Information regarding the
interests of such directors and executive officers (which may be different then
those of SumTotal`s stockholders generally) is included in SumTotal`s proxy
statements and Annual Reports on Form 10-K, as amended, previously filed with
the SEC, and the preliminary proxy statement relating to the proposed
transaction filed with the SEC on May 4, 2009. Each of these documents is
available free of charge at the SEC`s web site at http://www.sec.gov and from
SumTotal Investor Relations, at http://investor.sumtotalsystems.com.
Investors
SumTotal Systems, Inc.
Gwyn Lauber, 650-934-9584
glauber@sumtotalsystems.com
or
Media
Kimberley Kasper, 650-934-9579
kkasper@sumtotalsystems.com
or
Joele Frank, Wilkinson Brimmer Katcher
Matthew Sherman / Andi Salas
212-355-4449
msherman@joelefrank.com / asalas@joelefrank.com
Copyright Business Wire 2009
