GlobalSCAPE, Inc. (NYSE American: GSB), and HelpSystems, LLC today jointly announced they have signed a definitive merger agreement under which HelpSystems will acquire all outstanding shares of GlobalSCAPE for $9.50 per share in cash. The combined company would focus on providing the most comprehensive collection of trusted security and automation solutions to customers worldwide.
GlobalSCAPE is a leader in the secure managed file transfer software industry. With powerful cloud-based and on-premise solutions, the company helps organizations secure movement, automation, and integration of data both in and out of the cloud. The merger would augment HelpSystems’ data security business that includes data loss prevention and data classification software.
“GlobalSCAPE’s offerings are a great fit with HelpSystems’ suite of security products,” said Robert Alpert, CEO of GlobalSCAPE. “Our strength lies in moving mission-critical files both in and out of the cloud, coupled with our commitment to customer service and in helping organizations meet their cybersecurity and compliance needs. Joining HelpSystems solidifies and strengthens this promise.”
“GlobalSCAPE’s MFT solution and expertise further strengthen HelpSystems’ growing cybersecurity business,” said Kate Bolseth, CEO of HelpSystems. “Combining this with our data loss protection and data classification technology provides depth to our triple-threat defense against customer cybersecurity risks.”
Alpert commented, “Our success is rooted in our people; the men and women of GlobalSCAPE are passionately dedicated to client success. The product and individual awards earned over GlobalSCAPE’s 23-year history testify to our spirit of service. I am proud of our accomplishments, including our ability to return substantial capital to shareholders, with special dividends of $0.50 per share in May of 2019 and $3.35 per share in December of 2019, in addition to the $9.50 per share that holders will receive in the transaction with HelpSystems.”
Under the terms of the agreement between GlobalSCAPE and HelpSystems, HelpSystems has agreed to acquire all of the outstanding shares of GlobalSCAPE for $9.50 per share, which represents a 16% premium to the closing price for GlobalSCAPE stock on July 17, 2020. The transaction is structured as a tender offer followed by a merger, valued at approximately $217 million, including debt to be refinanced. The transaction will be funded with cash on hand and new debt. Jefferies Finance LLC and credit funds affiliated with Charlesbank Capital Partners LLC have provided a commitment to HelpSystems to provide the necessary debt financing.
The agreement has been unanimously approved by the Boards of Directors of both companies. Senior GlobalSCAPE management and current and former GlobalSCAPE directors and their affiliates, who collectively hold approximately 33 % of the outstanding shares, have agreed to tender their shares in the transaction. The transaction is subject to GlobalSCAPE’s stockholders tendering a majority of GlobalSCAPE’s outstanding shares prior to the expiration of the tender offer, certain regulatory approvals, and other customary conditions, and is expected to close in the third quarter of 2020.
GlobalSCAPE (acting through its financial advisor) will solicit alternative transaction proposals from third parties (“Go-Shop Parties”) for a period ending August 24, 2020, subject to customary conditions specified in the merger agreement. If the GlobalSCAPE board determines that an alternative transaction proposal is superior to the merger with HelpSystems, GlobalSCAPE may terminate the merger agreement and accept the superior proposal. In such an event, GlobalSCAPE must pay HelpSystems a customary termination fee that varies in amount depending on whether or not the superior proposal is from a Go-Shop Party. In addition, the merger agreement provides HelpSystems a customary right to match a superior proposal.
Stephens Inc. is serving as the exclusive financial advisor to GlobalSCAPE regarding the transaction, including the go-shop process. B. Riley FBR delivered a fairness opinion to the board of directors of GlobalSCAPE. Olshan Frome Wolosky LLP is serving as legal advisor to GlobalSCAPE. Goodwin Procter LLP is serving as legal advisor to HelpSystems.