Shareholders voted 98 per cent in favour of the $90.1 million acquisition after the board of directors unanimously approved the takeover.
"This is not some very quick overnight decision," said Terry Matthews, chair of March Networks's board of directors. "This is the best option for shareholders."
But after posting record third-quarter revenues earlier this month, many shareholders at the meeting stated that the technology company's financial status can keep it afloat, with no urgency for a takeover.
"For $5 (per share), you're giving the company away," said shareholder Ben Lank, adding that two months before he'd heard indications of interest at $7 per share.
"I didn't say I wouldn't prefer (the offer) to be higher," responded Mr. Matthews, who is also a serial entrepreneur and the chair of investment vehicle and holding company Wesley Clover, which supports several emerging companies in Ottawa.
He said the cash offering from Infinova is what he believes to be the best move for March Networks, a high-definition video surveillance provider for clients including Walmart, the Ottawa Senators and multiple banks across the globe.
Mr. Matthews explained that a camera in his office that cost him more than $2,000 a couple of years ago is valued at only $90 today. Being in a market with such volatile fluctuations has been difficult, he said, even with the company's strong client base, cash flow and valuable technology.
"If you have too many uphill battles, eventually something breaks," Mr. Matthews said.
The acquisition by Infinova will make March Networks a "formidable force," allowing it to join the ranks of electronics giants such as Panasonic Corp., General Electric Co. and Cisco Systems Inc., said March Networks's chief executive Peter Strom in a separate interview with OBJ.
Combined annual revenues will be more than $180 million, the company will retain $300 million in the bank for future acquisitions and growth, and it will have access to more than 500 engineers.
March Networks will still operate as a stand-alone company, Mr. Strom added, allowing it to grow "much more aggressively than we could have otherwise."
He said the takeover will likely turn out in a similar way to Cognos, which was acquired by IBM in 2007. The Ottawa company has added employees since that time.
"We're not moving a bunch of jobs overseas," he said, adding that the Ottawa office will likely see growth.
The company currently subcontracts the manufacturing of its parts to Sanmina-SCI in Mexico, but will consider moving that business to the Asian market, Mr. Strom said.
"We're looking forward to finishing the transaction and getting some stability back," said Mr. Strom, as many clients have held back orders because of the company's talks of strategic alternatives.
Each minority shareholder received one vote per common share, and the company had to secure more than 66 per cent affirmative votes for the arrangement to become effective.
The offer of $5 in cash per share is a 24-per-cent premium over the $3.36 closing price of March Networks's shares on June 9, 2011, the day before it announced a review of strategic alternatives, and a 2.2-per-cent premium over the $4.89 closing price on Dec. 8, 2011, the last trading day before the announcement of Infinova's offer.
The deal will be finalized by late March or early April, Mr. Matthews said at the meeting hosted at the Brookstreet Hotel.
Infinova (Canada) Ltd. is part of Shenzhen Infinova Ltd., an integrated surveillance system manufacturer in China.
.jpg)
