May 15, 2017

 

Norsat International Inc. announced that further to its news releases of September 19, 2016, March 17, 2017, March 27, 2017 and April 17, 2017, it has received an updated unsolicited, proposal from Privet Fund Management LLC ("Privet") to acquire the Company for cash consideration of US$11.00 per share (the "Privet Proposal").  The Privet Proposal is not subject to any due diligence or financing conditions.  Privet has indicated that it is prepared to sign a definitive agreement on non-financial terms and conditions substantially identical to the existing arrangement agreement with Hytera (the "Arrangement Agreement"). 

The Special Committee comprising all of the Independent Directors of the Board of Directors, in consultation with the Company's legal and financial advisors, will review and consider if the Privet Proposal is a "Superior Proposal" as defined in the Arrangement Agreement.  If, after completing the review, the Independent Directors determine that the offer by Privet is a Superior Proposal, they will notify Hytera of that determination.  Hytera will then have a period of five business days to offer to amend the terms of the Arrangement Agreement.  Hytera is under no obligation to make such an offer, but if they offer to amend the Arrangement Agreement and the Independent Directors determine that the proposal of Privet ceases to be a Superior Proposal, Norsat will enter into an amendment of the Arrangement Agreement and implement the amended offer.  If, after the Independent Directors determine the Privet offer is a Superior Proposal, Hytera does not offer to amend the Arrangement Agreement, or offers to amend but the Privet Proposal remains a Superior Proposal, Norsat intends to accept the Privet Proposal, terminate the Arrangement Agreement and pay Hytera the termination fee of US$2.0 million, all in accordance with the terms of the Arrangement Agreement.  However, a definitive agreement with Privet can only be executed by Norsat after approval from the Industrial Technologies Office representing the Strategic Aerospace and Defence Initiative program. Further, any transaction with Privet would be subject to approvals from and including but not limited to shareholders of Norsat, under the Investment Canada Act and Controlled Goods Directorate.

At this time, there can be no assurance that the Privet Proposal will lead to the termination of the Arrangement Agreement and the execution of a definitive agreement with Privet, or that the transaction contemplated by the Privet Proposal will obtain all necessary approvals or be consummated.