Mosaid Technologies , one of Canada’s biggest patent-licensing firms, is set to be acquired by a U.S.-based private equity firm, ending a months-long rival acquisition bid by another Canadian firm.
Sterling Partners, which manages about $5-billion (U.S.) in assets, will purchase Mosaid for $46 (Canadian) a share, or $590-million. The deal puts an end to an acquisition attempt by Ottawa-based patent firm Wi-LAN Inc. , which had hoped to combine Mosaid’s patent portfolio with its own, creating a Canadian licensing powerhouse in the process. Wi-LAN’s most recent bid, which the company said would be its last, was $42 a share.
Mosaid’s board, which has fought against Wi-LAN’s bid for months, has recommended its shareholders approve the Sterling offer. Mosaid had been looking for a white knight since Wi-LAN made its first acquisition offer in August.
On Aug. 17, Wi-LAN made an all-cash offer to acquire Mosaid for $38 a share, which at the time was roughly a 25 per cent premium over the 10-day volume-weighted average price. Mosaid’s board urged investors to reject the bid, and the company’s position grew stronger after the announcement that it was a partner in a massive patent-licensing deal with Microsoft and Nokia .
On Oct. 19, Wi-LAN sweetened its offer to $42 a share, and said that it had no intention to raise the offer any further.
During its attempt to find an alternative to Wi-LAN’s bid, Mosaid contacted 35 different parties to discuss their interest in the company. Of those, 12 expressed interest and entered into confidentiality agreements, the company said. Mosaid’s board ultimately deemed Sterling’s offer the most attractive.
The Sterling acquisition is still subject to approval by at least 66.67 per cent of Mosaid shareholder votes cast at a special meeting that will be held in late December or early January, the company said. The deal is also subject to legal and regulatory approval.