20-20 Technologies Sold
Back in May of this year, I suggested that 20-20 shouldn't be a publicly traded company, but who would have guessed something would happen so quickly.
Call me Nostradamus. :)
20-20 Technologies has struck a deal to be acquired by Vector Capital, a U.S. based investment firm. After accidentally tipping their hand at KBIS this year with numerous vendors, industry veterans and manufacturers, Vector has agreed to acquire all of the issued and outstanding shares of 20-20 for a valuation of $77 million.
Apparently 20-20 has been shopping around for quite some time with over "50 potential financial and strategic purchasers" in the U.S, Canada & Europe.
What Happens Next?
Mr. Mignault will be giving up the majority of his equity in 20-20 as well as his title as Executive Chairman of the Board. Moving forward he will retain 9.9% equity interest in the acquiring company and will get to be the "The Master of All Space, Time & Dimension" (or as Vector would call it, the Chief of Strategic Direction).
Mr. Mignault will be giving up the majority of his equity
The final ink isn't on the paperwork yet - but it is scheduled for 4th quarter this year. You can read the full press release if you want to read more.
Some other interesting tidbits
There was some commentary in other press releases today that implied 20-20 selling in part due to Canada's lack of a "mature financing system" that could have kept 20-20 as a Canadian owned entity.
About a year and a half ago, 20-20 was the target of a U.S. activist investor but Mr. Grou played down its role in pushing the company to being sold. Eric Rosenfeld of Crescendo Partners in New York fought for a new slate of directors in 2010 but did not win its battle. Mr. Ronsenfeld said in an interview that Crescendo "played a role in the outcome."
Crescendo went on to say that they are still assessing the Vector Capital offer. The board has recommended shareholders vote for the deal.
Though the market for its high-tech products has recovered, 20-20 Technologies could not marshal the capital for its next round of product and international market development, analysts said.
What Does This Mean?
It's all speculative, but I stand by my original guess that the company will be restructured and delisted from the Canadian stock exchange. The acquirers will attempt to streamline all aspects of the company and prep it for an eventual sale or a reemergence on the stock exchange as a stronger entity.
There could even be other acquisitions of other firms as Vector attempts to combine industry players into one larger entity in an effort to create that magical phrase of this decade called "shareholder value".
Will it turn into one giant effort of herding cats? Who knows, sometimes this kind of thing is just what the doctor ordered. Other times, it's best just to let the leg rot off. It's obvious 20-20 Technologies needed to do something. At least this way Jean Mignault gets a reward for his years of service in the form of a fat check.
I recommend the British Virgin Islands for an extended vacation. Jean - if you need some help learning how to free dive, call me. :)
