Endace board recommends shareholders accept takeover offer
The board of Endace is recommending shareholders accept a $US130 million takeover offer for the network security maker.
The US-listed storage equipment maker Emulex is offering £5 a share for the London AIM market listed firm, a premium of 65% to the stock's closing price on Tuesday.
Endace provides network security and data traffic management equipment to security agencies and telecommunication firms.
Key investors are backing the deal.
Emulex has secured Endace co-founder Ian Graham's 7.4% holding, an expression of support from 5.8% co-founder Selwyn Pellett, and commitments from two other directors holding 3% of the stock.
Endace chief executive Mike Riley has also committed his 594,000 share options to the deal.
He says the tie-up will allow it to rapidly expand its presence, while Emulex chief executive Jim McCluney says that includes the difficult US government sector.
Mr McCluney says there's now access to certain markets which Endace could not do, as a company not from the US.
Endace has received government investment support, and Mr Riley and Mr McCluney say they expect that to continue.
Mr McCluney says Endace's research and development base will remain in New Zealand.
Endace's independent directors say the deal is compelling, subject to the offer being within or above the valuation range in Grant Samuel's appraisal report of the bid.
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