EXFO’s plan to go private under the ownership of its founder and executive chairman has been approved by the Superior Court of Québec. The transaction is expected to be completed around August 27, meaning that the company will transition to being privately held before the end of this month.
In a special meeting on August 13, the transaction was approved by 99.65% of the votes cast by shareholders voting together as a single class, and 90.95% of the votes cast by holders of subordinate voting shares. Those percentages exclude voting shares held directly or indirectly by Chairman Germain Lamonde, who initiated the offer, and current CEO Philippe Morin.
EXFO has been privately held before, and it will be so once under Lamonde’s offer to buy out minority shareholders at $6.25 per share — despite multiple, very public attempts by competitor Viavi Solutions to acquire EXFO at higher per-share prices. Lamonde, the company’s controlling shareholder, rejected those offers repeatedly, making clear that he would not support of an acquisition by Viavi and that the only choice facing EXFO’s minority shareholders was that of whether to allow the company to remain public or to take it private under the arrangement he offered. Lamonde directly or indirectly controls 61.46% of the issued and outstanding shares of EXFO and 93.53% of the voting rights associated with those shares.
“To me, what’s very important is that I want to keep EXFO as a strong voice in the market,” Lamonde told RCR Wireless News in a recent interview, calling EXFO an “innovation engine” pushing the industry and its competitors forward as they face new challenges in deploying and assuring ever-faster wired and wireless network technologies.
On Viavi Solutions’ recent quarterly call with investors, Viavi CEO Oleg Khaykin, when asked about the company’s cash reserves and pursuit of EXFO, said that while Viavi knew full well that there would be no deal unless Lamonde decided to sell, the company “felt it was compelling and necessary for us to put a strong offer on the table to signal the value of the business because it’s effectively it’s our business as well. … We felt we owed it to our shareholders to signal that we’re not afraid to be aggressive and put an offer on the table. And there are other targets potentially out there and in due time, we’ll bring them up to the forefront as well.”
