SEAC SeaChange International Inc

SeaChange International, Inc. (OTC: SEAC) (“SeaChange” or the “Company”), a leading provider of video delivery, advertising, streaming platforms, and emerging Free Ad-Supported Streaming TV services (FAST) development, has entered into an asset purchase agreement (the “Purchase Agreement”) under which an affiliate of Partner One, one of the fastest-growing software conglomerates in the world, will acquire substantially all of SeaChange’s assets related to its product and services business (the “Asset Sale”), and will assume certain liabilities, for a purchase price of $30 million, less SeaChange’s cash and cash equivalents at closing (the “Closing”).

SeaChange has traditionally supported clients’ Operator TV systems, Advanced Advertising insertion platforms, the StreamVid streaming enablement solution, and the Xstream FAST channel service platform. The Company currently expects the transaction will result in net proceeds to SeaChange of between $13-15 million upon Closing.

The Asset Sale, which has been approved by SeaChange’s Board of Directors (the “Board”), is subject to various terms and closing conditions, including approval by a majority of the shares of SeaChange’s outstanding common stock. Subject to such closing conditions, the Closing is expected to occur in the first quarter of SeaChange’s fiscal year 2025.

“As previously reported, SeaChange has been active in evaluating its strategic alternatives to increase the scale of its technology platforms and leverage its software engineering teams, and we could not be more excited to partner with a world-class organization like Partner One for this journey. Our decision to monetize our product lines and sell our assets to a much larger and more experienced software company, like Partner One, is very positive news for our customers and is expected to generate new opportunities for our customers and teams,” said SeaChange’s Chief Executive Officer, Chris Klimmer. “With Partner One’s acquisition of these assets, SeaChange will be able to enhance its offerings to customers and continue to win market share in the dynamic PayTV, Video advertising and streaming markets.”

“We are thrilled to welcome SeaChange’s renowned streaming and advertising technology into our portfolio. SeaChange's track record of innovation and customer satisfaction aligns perfectly with our mission to empower businesses with market-leading technologies and impeccable service. Leveraging Partner One's financial strength and the collective expertise, SeaChange's technology will continue to drive success and profitability for operators, broadcasters, and content owners worldwide," emphasized Nick Riuma, Principal at Partner One.

Following the Closing, the Company will retain its cash and cash equivalents, and U.S. and state net operating loss carryforwards (“NOLs”), which may be available to offset future tax income.

The Purchase Agreement provides that, during the period beginning on the execution date of the Purchase Agreement and continuing until 11:59 p.m., New York City time, on April 8th, 2024, SeaChange and its subsidiaries have the right to, directly or indirectly: (i) encourage, solicit, initiate, facilitate or continue inquiries regarding an offer or proposal that constitutes, or could reasonably be expected to lead to, an acquisition proposal and (ii) enter into discussions or negotiations with any person concerning a possible acquisition proposal; provided however, SeaChange and its subsidiaries will not disclose any non-public information about Partner One or the Asset Sale and related transactions, without prior written approval of Partner One. There can be no assurances that the solicitation of such possible acquisition proposals will result in a Superior Proposal (as defined in the Purchase Agreement). It is not anticipated that any developments will be disclosed with regard to this process unless the Board makes an affirmative decision to proceed with a Superior Proposal. In addition, SeaChange may, subject to the terms of the Purchase Agreement, respond to unsolicited, bona fide, written alternative acquisition proposals. The Purchase Agreement also contains a $1 million termination fee payable to Partner One in connection with the termination of the Purchase Agreement under certain circumstances, such as consummation of an alternative acquisition transaction in connection with a Superior Proposal.

In addition, concurrently with the execution of the Purchase Agreement, a significant stockholder (the “Significant Stockholder”) of the Company, that cumulatively owns 30.5% of the shares of SeaChange’s outstanding common stock, has entered into a voting agreement with Partner One pursuant to which the Significant Stockholder has agreed, subject to the terms and conditions therein, to vote its shares of common stock of the Company to approve the Asset Sale at the SeaChange special meeting of stockholders.

Needham & Company, LLC is acting as exclusive financial advisor to SeaChange in this transaction, and K&L Gates LLP is acting as legal counsel to SeaChange in this transaction.

Other News—Suspension of the Tax Benefits Preservation Plan to Protect Tax AssetsAs disclosed earlier, on August 16, 2023, SeaChange approved and adopted a Tax Benefits Preservation Plan (the “Rights Agreement”), by and between the Company and Computershare Trust Company, N.A., as rights agent. The Board adopted the Rights Agreement to reduce the likelihood that future acquisitions of SeaChange common shares would result in an “ownership change,” as defined in Section 382 of the Internal Revenue Code of 1986, as amended, thereby limiting the Company’s ability to use its NOLs to reduce the Company’s potential future income tax obligations. On March 7, 2024, the Board approved a suspension of the Rights Agreement; however, the Board, in its sole discretion, may reinstate the Rights Agreement.

About SeaChange International, Inc.SeaChange International, Inc. (OTC: SEAC) provides first-class video streaming, linear TV, and video advertising technology for operators, content owners, and broadcasters globally. SeaChange technology enables operators, broadcasters, and content owners to cost-effectively launch and grow premium linear TV and direct-to-consumer streaming services to manage, curate, and monetize their content. SeaChange helps protect existing and develop new and incremental advertising revenues for traditional linear TV and streaming services with its unique advertising technology. SeaChange enjoys a rich heritage of nearly three decades of delivering premium video software solutions to its global customer base.

About Partner OnePartner One is one of the fastest-growing enterprise software groups in the world, with a proven track record of acquiring and growing enterprise software companies. Over 1,200 enterprises and government organizations rely on Partner One software, including 80% of the largest companies in the world. For more information, please visit: PartnerOne.com

Forward-Looking StatementsThis press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In general, forward-looking statements usually may be identified through use of words such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue”, and “potential,” or the negative of these terms, or other comparable terminology, and include statements related the amount of net proceeds SeaChange receives from the transaction, the ability and timing to close the Asset Sale, the ability to generate new opportunities for our customers and employees, the ability to enhance the Company’s offerings to customers and continue to win market share in the dynamic PayTV, Video advertising and streaming markets, NOLs availability to offset tax income in the future, and the ability of SeaChange's technology to continue to drive success and profitability for operators, broadcasters, and content owners worldwide. Forward-looking statements are not historical facts and represent management’s beliefs, based upon information available at the time the statements are made, with regard to the matters addressed; they are not guarantees of future performance. Actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks, and uncertainties that change over time that could cause actual results to differ materially from those expressed in or implied by such statements. Many of the factors that could cause actual results to differ materially from those expressed in or implied by forward-looking statements are beyond the ability of the Company or Partner One to control or predict. Stockholders and investors should not place undue reliance on any forward-looking statements. Any forward-looking statements speak only as of the date of this press release, and neither SeaChange nor Partner One undertakes any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

Contact:SeaChange International 1.978.897.0100info@schange.com