Hytera to Aquire Norsat

March 27, 2017 

Norsat International Inc.  has entered into an arrangement agreement (the “Arrangement Agreement”) with Hytera Project Corp. (“Hytera”) a subsidiary of Hytera Communications Co., Ltd. pursuant to which Hytera will acquire all the issued and outstanding shares of Norsat for $10.25 in United States dollars (“USD”) in cash per share, pursuant to a court-approved plan of arrangement (the “Arrangement”).  All unexercised options and restricted share units will also be acquired under the Arrangement. The proposed transaction values Norsat at an equity value of approximately $62 million USD.

As previously disclosed by Norsat on March 17, 2017, Privet Fund Management LLP (“Privet”) submitted a non-binding letter of interest to acquire the Company for cash consideration of $10.25 USD per share subject to due diligence, financing, the completion of a definitive agreement and other conditions. At that time, Norsat and Hytera were in exclusivity with respect to a possible transaction. Based on Hytera’s offer of the same cash consideration as indicated in Privet’s non-binding letter of interest, with no further due diligence, no financing conditions and the synergies between Norsat and Hytera including but not limited to a greater global sales presence, access to additional markets and research and development collaboration, the Independent Directors of Norsat’s Board of Directors (the “Board”) decided to proceed with the Arrangement Agreement.

“After discussions with multiple parties and a comprehensive review of several indications of interest with respect to a strategic transaction, we are very pleased to have reached an agreement with Hytera. We believe this all-cash transaction offers Norsat shareholders immediate liquidity and certainty of value. We thank our shareholders for their patience and support during the strategic review, a process that has ultimately surfaced significant value for all Norsat shareholders,” said Fabio Doninelli, Director and Chairman of the Board.

Cash Consideration and Attractive Premium – Under the Arrangement, shareholders of Norsat will receive $10.25 USD per Norsat share in cash, offering immediate liquidity and certainty of consideration. The cash consideration per share represents a premium of 62% over the unaffected trading price of the shares on the Toronto Stock Exchange, on September 16, 2016, the last trading day prior to the announcement on September 19, 2016 by Privet, a shareholder of Norsat of its interest in acquiring Norsat. The Arrangement also represents a premium of 66% over the 20-day VWAP on the Toronto Stock Exchange ending on September 16, 2016.

Independent Directors Support and Approval –The Independent Directors have unanimously determined that the Arrangement is in the best interests of Norsat and its shareholders. The Board has received opinions from its financial advisor, Raymond James Ltd., and from KPMG LLP, an independent advisor, that as of March 24, 2017 and subject to the assumptions, limitations and qualifications set forth herein, the consideration to be received by shareholders of Norsat pursuant to the Arrangement Agreement is fair, from a financial point of view, to shareholders of Norsat (the “Fairness Opinions”).