MOUNTAIN VIEW, Calif. – May 27, 2009 – SumTotal Systems, Inc. (NASDAQ: SUMT) ("SumTotal" or "the Company"), the market leader and a global provider of talent development solutions, today announced that it has entered into a definitive merger agreement with affiliates of Vista Equity Partners Fund III, L.P. ("Vista") under which Vista will acquire all the outstanding shares of SumTotal common stock for $4.85 per share in cash (the "Vista Agreement"), or approximately $160 million. The Vista Agreement was unanimously approved by the Board of Directors of SumTotal.
The purchase price represents a premium of approximately 141.3% over SumTotal’s closing share price on April 3, 2009, the last trading day prior to the public announcement of Vista’s proposal to acquire SumTotal for $3.25 per share in cash, and a premium of approximately 196.9% over SumTotal’s average closing share price for the 30 trading days ending on April 3, 2009.
SumTotal also announced that, concurrent with entering into the Vista Agreement, SumTotal terminated its previously announced amended merger agreement with affiliates of Accel-KKR (the "Prior Agreement") following the expiration of the negotiation period granted to Accel-KKR under the terms of the Prior Agreement. In accordance with the terms of the Prior Agreement, SumTotal paid a termination fee of $6.67 million to affiliates of Accel-KKR.
Jack Acosta, Chairman of the Board of Directors of SumTotal, said, "Our agreement with Vista provides an increased all-cash premium to our stockholders and reflects Vista’s strong commitment to the transaction. Throughout this process, our Board has been steadfastly committed to maximizing stockholder value and we are proud of the value we have delivered to our stockholders. We look forward to working with Vista to ensure a smooth transition and complete the transaction as expeditiously as possible."
"The transaction with Vista validates SumTotal’s strategy and is a testament to our leadership position in the marketplace," said Arun Chandra, Chief Executive Officer of SumTotal. "This transaction is compelling for our company, our customers, and our employees and we look forward to benefiting from Vista’s expertise as we continue to deliver innovative solutions to our customers and execute to win in the markets around the world."
Robert F. Smith, Managing Principal of Vista Equity Partners, said, "We are pleased the SumTotal Board of Directors concluded that Vista’s agreement maximizes value for all SumTotal stockholders and provides the best path forward for all of the Company’s constituents, including its valued customers. We believe strongly that SumTotal is an outstanding company with a competitive advantage and bright future, and that, together with Vista’s operational expertise and experience in enterprise application software, we can continue to build on the Company’s market-leading position. We very much look forward to working closely with SumTotal’s management team, employees, customers and suppliers upon completion of the transaction."
The transaction is subject to customary closing conditions, including the approval of SumTotal’s stockholders. There is no financing condition to the transaction.
RBC Capital Markets Corporation is acting as financial advisor to the Board of SumTotal, and Wilson Sonsini Goodrich & Rosati, Professional Corporation, is acting as SumTotal’s legal advisor. Union Square Advisors LLC is acting as financial advisor to Vista, and Sullivan & Cromwell LLP is acting as Vista’s legal advisor.
About Vista Equity Partners
Vista Equity Partners ("VEP"), a private equity firm with offices in San Francisco and Chicago, has over $2.3 billion in equity capital under management. VEP was founded in 2000 and is focused on equity transactions involving enterprise software businesses and technology-enabled solutions companies. Over the last nine years, VEP has successfully demonstrated its ability to create value through a disciplined investment focus on companies that offer mission-critical software and technology-enabled solutions. Since 2000, the VEP team has invested over $1.4 billion in equity and completed over $7 billion in total transaction value. Vista Equity Partners’ financial and operational abilities combined with its depth of experience in the software sector enable VEP to complete diligence quickly and to provide a high degree of deal certainty. VEP is currently investing out of its latest fund, $1.3 billion Vista Equity Partners Fund III, which closed in 2008.
About SumTotal Systems, Inc.
SumTotal Systems, Inc. (NASDAQ:SUMT) is the market leader and a global provider of talent development solutions. SumTotal deploys mission-critical solutions designed to drive learning, align goals, develop skills, assess performance, plan for succession and set compensation. SumTotal’s solutions aim to accelerate performance and profits for more than 1,500 companies and governments of all sizes, including six of the world’s 10 biggest pharmaceutical makers, six of the 10 largest automotive companies in the world, four of the five branches of the U.S. Armed Forces, three of the world’s top five airlines, five of the six largest U.S. commercial banks and two of the world’s top five specialty retailers. Mountain View, CA-based SumTotal has offices across Asia, Australia, Europe and North America. For more information about SumTotal’s products and services, visit www.sumtotalsystems.com.