Bravura agrees to Ironbridge proposal at $1.73 cash per share

05 May 2008 Bravura agrees to Ironbridge proposal at $1.73 cash per share

 

Sydney 5 May 2008 - Sydney-based financial services software group Bravura Solutions Limited (Bravura, ASX: BVA) and private equity investor Ironbridge Capital Pty Limited (Ironbridge) today announced a proposal under which a company to be owned by funds advised by Ironbridge and senior management of Bravura, would acquire 100 per cent of the issued shares in Bravura. The acquisition is to be implemented by way of a scheme of arrangement between Bravura and its shareholders, other than Messrs Iain Dunstan and Simon Woodfull (Share Scheme) and a scheme of arrangement between Bravura and Messrs Iain Dunstan and Simon Woodfull (Executive Directors' Scheme). The Share Scheme and the Executive Directors' Scheme are inter-conditional.

Under the terms of the Share Scheme, Bravura shareholders (other than Messrs Dunstan and Woodfull) will receive $1.73 in cash per Bravura share. The terms of the Executive Directors' Scheme provide for Messrs Dunstan and Woodfull to exchange a combined shareholding in Bravura of approximately 30.57 per cent1 for a combination of cash and shares in a special purpose vehicle established by Ironbridge that will hold Bravura as a stand-alone investment.

On a fully diluted enterprise basis, the Ironbridge proposal values Bravura at approximately $272 million, based on net debt as at 31 March 2008. The proposed consideration of $1.73 cash per share represents:

  • an 18.5 per cent premium to Bravura’s last traded price on ASX on 11 April 2008 of $1.46; and
  • a 14.0 per cent premium to Bravura’s three month volume weighted average price to the last trade on ASX on 11 April 2008 of $1.52.

The Ironbridge proposal has been unanimously recommended by the Board of Bravura, in the absence of a superior proposal and subject to the receipt of an independent expert's report that the proposed transaction is in the best interests of Bravura shareholders. Subject to those same qualifications, Bravura’s Directors unanimously intend to vote all of the shares they hold or control in favour of the two schemes.

The Ironbridge proposal is subject to a number of conditions, including:

  • Iain Dunstan and Simon Woodfull having full title and ownership in at least 43,420,689 of the Company’s shares (please refer to Bravura's ASX announcement dated 1 May 2008 entitled, 'Further update on Lift Capital');
  • execution by the Ironbridge bidding entity of full form financing documentation on substantially the
    terms contemplated by the financing term sheets
  • confirmation that Bravura’s adjusted EBITDA for FY08 is at least $23.5 million; and
  • shareholder and Court approval of each scheme.

Further information of the key terms and conditions is set out in Annexure A to this announcement.

The proposal from Ironbridge follows a confidential process conducted by the Company, which was initiated in early February 2008 following receipt of a number of confidential approaches to the Company. This sale process was overseen by a special independent committee of the Board which comprised Elana Rubin (Chair), James MacKenzie and John Loebenstein.

Ironbridge director Matt McLellan said:

"Bravura is a well positioned business in an attractive market sector. As a global leader in the provision of software and professional services to the wealth management and transfer agency industries, its growth prospects are strong. We look forward to partnering with Bravura and investing in future growth opportunities with the business."

"Ironbridge’s understanding of Bravura’s business and our ability to add value to the investment is founded in our key target sector approach to private equity investment, which includes, amongst others, financial and outsourced services.”

Commenting on the Ironbridge proposal, Chair of Bravura's independent Board Committee, Elana Rubin, said:

“Ironbridge's proposal provides an attractive opportunity for shareholders to realise value in respect of their shareholding in Bravura. Accordingly, the Board is pleased to recommend the proposal from Ironbridge in the absence of a superior proposal and subject to the receipt of an independent expert's report that the proposed transaction is in the best interests of Bravura shareholders. In making the above recommendation, the Board has had regard to a number of alternative and confidential expressions of interest received during the process which was initiated in February 2008.”

Transaction details

Bravura and a special purpose subsidiary of Ironbridge have entered into an Implementation Agreement which provides a framework for implementing the proposed schemes, as well as certain other matters including break fee and exclusivity arrangements.

Each scheme will require the separate approval of each class of Bravura’s shareholders, as well as the approval of the Supreme Court of Victoria or such other court of competent jurisdiction under the Corporations Act determined by the Company (Court). The other key terms and conditions of the Ironbridge proposal are summarised in Annexure A to this announcement.

The proposed acquisition of all the Bravura shares under the schemes will be financed from a combination of debt funding, equity sources from funds managed or advised by Ironbridge and a partial rollover of the combined shareholdings of Bravura's Group CEO & Managing Director, Mr Iain Dunstan and Bravura's Group CEO & Director - Operations, Mr Simon Woodfull. They have each agreed to remain employed in executive capacities with Bravura if the proposed transaction is approved and implemented.

Timing

An Explanatory Booklet with full details of the proposed transaction, including an Independent Expert’s Report, is expected to be despatched to Bravura shareholders in mid to late June 2008. The meetings to approve the schemes are expected to be held in mid to late July 2008. Assuming all necessary approvals and conditions are satisfied, the Ironbridge proposal is expected to be implemented by mid August 2008.

A more detailed timetable for the approval and implementation of the proposed transaction will be announced in due course.

Bravura is being advised by O'Sullivan Pullini (financial adviser) and Minter Ellison (legal adviser).

Ironbridge is being advised by Oaktower Partnership and Macquarie Capital Advisers (joint financial advisers) and Baker &McKenzie (legal adviser).