HERNDON, Va., Feb. 14, 2011 /PRNewswire-FirstCall/ -- Arbinet
Corporation (Nasdaq: ARBX) ("Arbinet"), a leading provider of
telecommunications services to fixed and mobile operators,
announced that it signed a definitive agreement to sell its
portfolio of patents and patent applications for a purchase price
of $4,000,000 to AIP Acquisition LLC
("AIP") on February 11, 2011.
Arbinet's patent sale to AIP is expected to close this week.
In connection with the sale, Arbinet and AIP entered into a
license agreement, which, among other things, will grant to Arbinet
and its affiliates a royalty-free, worldwide, assignable and
perpetual license to the patents, patent applications and
associated rights when the patent sale closes.
Arbinet previously announced on November
11, 2010 that it entered into a definitive merger agreement
with Primus Telecommunications Group, Incorporated ("Primus"),
pursuant to which Primus is to acquire Arbinet in a stock-for-stock
transaction. Under the terms of the merger agreement, Arbinet
retained the right, in its sole discretion, to spin-off to its
stockholders or to sell to a third party for cash certain
identified patents and rights arising from such patents, subject to
certain limitations, including that all transaction costs, fees and
expenses and gross tax liabilities attributable to any such
spin-off or sale would not exceed $350,000 in the aggregate and that Arbinet would
first grant Primus a royalty-free, worldwide, assignable and
perpetual license and right to use any and all such patents and
rights.
On February 11, 2011, Arbinet
notified Primus of Arbinet's election to add the net proceeds from
the sale of its portfolio of patents and patent applications,
dollar for dollar, to the aggregate base merger consideration of
$28,000,000, which will increase the
exchange ratio in the merger to greater benefit Arbinet's
stockholders, as explained below.
In connection with the proposed merger, Arbinet and Primus filed
a definitive joint proxy statement/prospectus with the Securities
and Exchange Commission (the "SEC") on January 14, 2011. As described in the joint
proxy statement/prospectus, the stockholder meetings for both
Arbinet and Primus have been set for February 25, 2011. Assuming all conditions
precedent have been satisfied, the merger is expected to close on
February 28, 2011. Under the
terms of the license agreement signed by Arbinet on February 11, 2011 simultaneously with the entry
into the definitive agreement to sell Arbinet's patent assets, upon
the consummation of the merger between Arbinet and Primus, Primus
and each of its affiliates will automatically be entitled to the
same rights and benefits as Arbinet under the license agreement
without any further action by Arbinet, Primus, AIP or any of their
respective affiliates.
Effect of Arbinet's Patent Sale on Exchange Ratio in
Acquisition by Primus
Arbinet estimates the net proceeds from the sale of Arbinet's
portfolio of patents and patent applications would equal
$3,650,000 and the aggregate base
merger consideration would be increased by such net proceeds from
$28,000,000 to $31,650,000. The
actual exchange ratio in the merger cannot be determined until just
before closing of the merger because the calculation of such ratio
depends on the number of shares of Arbinet common stock issued and
outstanding immediately prior to the consummation of the merger and
shares that may become issuable as Primus common stock at or after
the closing of the merger in connection with Primus's assumption of
Arbinet's outstanding warrants, options, stock appreciation rights
and other equity awards (subject to the exclusion of certain
issuable shares that fail to meet certain criteria set forth in the
merger agreement). Therefore, relying on the assumptions set
forth in each of the joint proxy statement/prospectus dated and
filed on January 19, 2011 with the
SEC and delivered to Arbinet's and Primus's stockholders of record,
and the registration statement, as amended, filed by Primus on
January 14, 2011 with the SEC, other
than with respect to the assumption regarding aggregate base merger
consideration, which has been assumed to be $31,650,000 (instead of $28,000,000, as set forth in the joint proxy
statement/prospectus and the registration statement), the exchange
ratio, as of January 7, 2011, would
be expected to be 0.5794 (instead of 0.5126, as set forth in the
joint proxy statement/prospectus and the registration statement).
The actual exchange ratio may vary significantly from the
ratio determined above based on the assumptions in the joint proxy
statement/prospectus and the registration statement and with
respect to the aggregate base merger consideration amount provided
above.
It is anticipated that, immediately following completion of the
merger, and based on the same assumptions as described in the
immediately preceding paragraph, Arbinet stockholders (by virtue of
holding Arbinet common stock immediately prior to the effective
time of the merger) would own approximately 24.6% of the
outstanding shares of Primus common stock (instead of 22% of the
outstanding shares of Primus common stock, as set forth in the
joint proxy statement/prospectus and the registration
statement).
About Arbinet
Arbinet is a leading provider of international voice, data and
managed communications services for fixed, mobile and wholesale
carriers. With more than 1,200 carrier customers across the globe
connected to Arbinet's network, Arbinet combines global scale with
sophisticated platform intelligence, call routing and industry
leading credit management and settlement capabilities. Arbinet
offers these communication services through three primary product
offerings including thexchange(SM), Carrier Services and
PrivateExchange(SM). Arbinet's thexchange(SM) platform, the largest
online wholesale voice trading exchange, continues to provide
customers with access to a neutral marketplace to buy and sell
global voice and data traffic. Arbinet owns and operates a global
network of next generation IP soft switches, media gateways, IP
transport and co-location centers located in the United States, United Kingdom, Hong
Kong, Frankfurt and
Miami. Founded in 1996, Arbinet is
headquartered in Herndon,
Virginia.
Important Information and Where to Find It
In connection with the proposed merger, Arbinet and Primus filed
a definitive joint proxy statement/prospectus with the SEC on
January 14, 2011. Copies of the
definitive joint proxy statement/prospectus were sent to
stockholders of record of both Arbinet and Primus seeking their
approval of certain matters incident to the proposed merger.
Arbinet and Primus also plan to file other documents with the
SEC regarding the proposed transaction. INVESTORS AND
STOCKHOLDERS ARE URGED TO CAREFULLY READ THE DEFINITIVE JOINT PROXY
STATEMENT/PROSPECTUS, AND OTHER DOCUMENTS FILED WITH THE SEC WHEN
THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Investors and stockholders may obtain a free
copy of the definitive joint proxy statement/prospectus and other
documents filed by Arbinet and Primus with the SEC, without charge,
at the SEC's web site at www.sec.gov. Copies of the definitive
joint proxy statement/prospectus and Primus's SEC filings that were
incorporated by reference in the definitive joint proxy
statement/prospectus may also be obtained for free by directing a
request to: (i) Primus (703) 748-8050, or (ii) Arbinet (703)
456-4100.
Participants in the Solicitation
Arbinet, Primus, and their respective directors, executive
officers and other members of their management and employees may be
deemed to be "participants" in the solicitation of proxies from
their respective stockholders in connection with the proposed
merger. Investors and stockholders may obtain information
regarding the names, affiliations and interests of Primus's
directors, executive officers and other members of its management
and employees in Primus's Annual Report on Form 10-K for the year
ended December 31, 2009, which was
filed with the SEC on April 5, 2010,
and amended in a Form 10-K/A filed with the SEC on April 28, 2010, Primus's proxy statement for its
2010 annual meeting, which was filed with the SEC on June 14, 2010, and any subsequent statements of
changes in beneficial ownership on file with the
SEC. Investors and stockholders may obtain information
regarding the names, affiliations and interests of Arbinet's
directors, executive officers and other members of their management
and employees in Arbinet's Annual Report on Form 10-K for the year
ended December 31, 2009, which was
filed with the SEC on March 17, 2010,
Arbinet's proxy statement for its 2010 annual meeting, which was
filed with the SEC on April 30, 2010,
and any subsequent statements of changes in beneficial ownership on
file with the SEC. These documents can be obtained free
of charge from the sources listed above. Additional
information regarding the interests of these individuals is also
included in the definitive joint proxy statement/prospectus
regarding the proposed transaction.
Forward-Looking Statements
This press release includes "forward-looking statements" as
defined by the SEC. All statements, other than statements of
historical fact, included herein that address activities, events or
developments that Arbinet or Primus expects, believes or
anticipates will or may occur in the future, including anticipated
benefits and other aspects of the proposed merger, are
forward-looking statements. These forward-looking statements
are subject to risks and uncertainties that may cause actual
results to differ materially. Risks and uncertainties that
could affect forward-looking statements include, but are not
limited to, the following: the risk that the merger may not be
consummated for reasons including that the conditions precedent to
the completion of merger may not be satisfied; the possibility that
the expected synergies from the proposed merger will not be
realized, or will not be realized within the anticipated time
period; the risk that Primus's and Arbinet's businesses will not be
integrated successfully; the possibility of disruption from the
merger making it more difficult to maintain business and
operational relationships; any actions taken by either of the
companies, including, but not limited to, restructuring or
strategic initiatives (including capital investments or asset
acquisitions or dispositions); the ability to service substantial
indebtedness; the risk factors or uncertainties described from time
to time in Arbinet's filings with the SEC; and the risk factors or
uncertainties described from time to time in Primus's filings with
the SEC. Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of their dates.
Except as required by law, neither Arbinet nor Primus intends
to update or revise its forward-looking statements, whether as a
result of new information, future events or otherwise.
Contacts:
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Gary Brandt, Chief Financial
Officer
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Arbinet Corporation
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(703) 456-4140
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Andrea Rose / Jed
Repko
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Joele Frank, Wilkinson Brimmer
Katcher
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(212) 355-4449
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SOURCE Arbinet Corporation