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Actua to sell three majority-owned businesses for USD549m in cash

Actua Corporation has entered into separate agreements to sell its three majority-owned businesses – VelocityEHS, Bolt Solutions and FolioDynamix – for an aggregate of USD549 million in cash.

The sales are the result of the Board’s comprehensive review of a range of strategic options to maximise stockholder value, which was undertaken with the support of independent financial and legal advisors.
 
The Company expects to realise aggregate cash proceeds in the range of between approximately USD472 million and approximately USD502 million and does not currently expect to pay material federal taxes in connection with the transactions. Following completion of the transactions, Actua intends to distribute substantially all of the net proceeds from the transactions to Actua stockholders in one or more distributions. The Company would expect a distribution to occur sometime during the first quarter of 2018. The net proceeds from these two transactions represents approximately USD14.35 to USD15.18 per share, or a premium of between approximately 16 per cent and 23 per cent over Actua’s closing stock price on September 22, 2017, the last trading day prior to the announcement of the transactions. This calculation is based on 32.8 million shares outstanding as of September 22, 2017.
 
Following completion of the sale of VelocityEHS, Bolt Solutions and FolioDynamix, Actua intends to wind down its operations and discharge any remaining obligations it has relating to the transactions or otherwise. As part of this process, the Company expects to significantly reduce its operating costs while it focuses on opportunities to monetise its remaining minority holdings, with the goal of selling its stakes in these holdings over a 12- to 18-month period and distributing the net proceeds associated with such sales to Actua stockholders in one or more distributions. Based on the information available to the Company at this time, the expected net proceeds from the monetisation of Actua’s minority holdings, combined with the expected net proceeds from the sale of VelocityEHS, Bolt Solutions and FolioDynamix, represents, in the aggregate, approximately USD15.68 to USD16.50 per share, or a premium range of approximately 27 per cent to 34 per cent to Actua’s closing price as of the last trading day prior to the announcement of the transactions. This calculation is based on 32.8 million shares outstanding as of 22 September, 2017.
 
CVC Growth Fund (CVC) is to acquire VelocityEHS, a leading EHS software company, and the Company’s interest in Bolt Solutions, Actua’s online insurance service platform, for an aggregate purchase price of USD328 million in cash, which is based on a total enterprise value of USD354 million, a portion of which will be used to pay the Company’s transaction costs.
 
Envestnet is to acquire FolioDynamix, Actua’s web-based wealth management technology platform, for USD195 million in cash, subject to certain adjustments, including a potential downward purchase price adjustment associated with certain closing deliverables and customary adjustments for working capital, cash, debt and transaction costs. A small portion of the proceeds will be held in escrow to satisfy potential indemnification claims. The sale of FolioDynamix is expected to close in the first quarter of 2018.
 
“We are pleased to reach these agreements with CVC and Envestnet, as they are the successful result of a comprehensive strategic review process undertaken by our Board, designed to maximise the value of our businesses and provide attractive liquidity for our stockholders,” says Walter Buckley (pictured), co-founder and Chief Executive Officer and Chairman of Actua. “With the support of independent financial and legal advisors, we evaluated a number of strategic alternatives and contacted a significant number of financial and strategic buyers.
 
“We believe these transactions are a testament to the high-quality SaaS businesses that Actua has built through tactical investments in talent, sales, marketing and product development. We are confident that VelocityEHS, Bolt Solutions and FolioDynamix will continue to serve their customers well and thrive under their new owners. Most importantly, in our quest to maximise stockholder value, we believe these transactions are the optimal outcome for our stockholders and deliver significant cash value for their investment in Actua.”
 

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