HP to acquire Canberra-based Tower Software
HP has entered into a pre-bid agreement to acquire Canberra-based document management specialist Tower Software for AU$3.39 per share.
Tower's board of directors have approved the transaction, however the deal still hinges on formal approval by Tower's major shareholders Quadrant Private Equity, Tower's founder Brand Hoff and CEO Martin Harwood, who between them own 90 percent of the company.
The shareholders have said they would accept HP's offer of AU$3.39 per share "in the absence of a higher third-party offer".
"I am pleased to fully support this transaction and encourage our Tower shareholders to accept HP's offer, in the absence of a higher third-party offer," founder of Tower Software, Brand Hoff said in a statement.
Quadrant has also granted HP a call option to acquire 19.9 percent of Tower's total shares if a competing takeover proposal is made.
The deal offers HP a break-up fee of AU$1.2 million if it falls through or conditions of the sale are not met.
HP has demanded ownership of at least 90 percent of the company, and that 85 percent of Tower's 240 staff remain with HP following the acquisition.
Amongst its Australian client list, Tower boasts the Attorney General's office and about a third of the Australian Department of Defence.
"We have about 80 percent of the Commonwealth Government," said Hoff.
Tower's largest customer is the US Department of Defense, which signed a US$45.2 million licensing deal in 2006.
The deal is expected to close in the second half of 2008.