HS GovTech Announces Execution of Arrangement Agreement

HS GovTech Solutions Inc., a leading provider of SaaS applications for government, has recently announced the execution of an arrangement agreement with a US private equity fund operated by Banneker Partners LLC. This agreement will result in the acquisition of all the issued and outstanding common shares of HS GovTech by the purchaser. The transaction is valued at approximately $33.3 million and will be an all-cash deal.

‍Transaction Summary

Under the terms of the arrangement agreement, the purchaser will acquire 100% of the issued and outstanding shares of HS GovTech for a cash consideration of $0.54 per share. This represents a significant premium to the closing price of the shares on the Canadian Securities Exchange. The transaction will be implemented through a court-approved plan of arrangement.

The completion of the transaction is subject to securityholder, court, and regulatory approvals. It is expected to close in late November 2023. Upon completion of the transaction, HS GovTech will no longer be listed on any public market.

Benefits of the Transaction

The transaction with Banneker Partners offers HS GovTech securityholders a substantial premium to the recent trading price of the company's shares. It will provide HS GovTech with additional resources to continue delivering innovative solutions to government organizations. The partnership with Banneker Partners will drive continued growth and enable HS GovTech to invest in new features and products that help government agencies operate more efficiently.

Comments from Key Stakeholders

Ali Hakimzadeh, Chair of the Company's Board, commented, "We are pleased to announce this Transaction with Banneker Partners, which offers our securityholders a significant premium to the recent trading price of the Company's shares. After careful consideration, the Special Committee and the Company's Board have both unanimously concluded (with conflicted directors abstaining) that the Transaction is fair to HS GovTech's securityholders and recommends that they vote in favour of the Transaction."

Kenneth Frank, Partner at Banneker Partners, commented "HS GovTech's robust technology platform, innovative product portfolio and committed team have proven themselves in delivering mission-critical tools to agencies supporting our communities." Hugh Kirkpatrick, Principal at Banneker, added "We are excited to partner with HS GovTech's talented management team to drive continued growth, as we build upon their leading government software platform and bring new solutions to the market."

Silas Garrison, Chief Executive Officer of the Company, stated "I am excited about partnering with Banneker Partners to continue delivering the best service and platform available in the market.  This partnership will allow us to invest even more into new features and products that will further our mission of helping government agencies operate more efficiently by going beyond data management."

Key Transaction Highlights

• Shareholders of HS GovTech will receive $0.54 per share in cash, representing a premium to the recent trading price of the company's shares.
• The transaction is subject to customary closing conditions, including approval from HS GovTech securityholders.
• The Special Committee and the Board of Directors of HS GovTech unanimously recommend that securityholders vote in favor of the transaction.
  

Future Outlook

The acquisition by Banneker Partners will position HS GovTech for continued growth and success in the government software market. With access to additional resources and expertise, HS GovTech will be able to further enhance its product portfolio and deliver even better service to its clients.

This transaction underscores the importance of technology and innovation in the government sector. HS GovTech's cloud and mobile-based platforms have already proven their value in over 800 state and local government organizations across North America. The partnership with Banneker Partners will enable HS GovTech to expand its reach and provide even more efficient solutions to government agencies.

As the transaction moves forward, HS GovTech will continue working closely with its stakeholders to ensure a smooth and successful transition. The company remains committed to its mission of helping government agencies operate more efficiently and looks forward to a bright future under new ownership.

Conclusion

The execution of the arrangement agreement between HS GovTech and Banneker Partners marks an important milestone for both companies. The transaction will provide HS GovTech with the resources and support needed to drive continued growth and deliver innovative solutions to government agencies. With this partnership, HS GovTech is well-positioned to strengthen its position as a leader in the government software market and continue making a positive impact on the efficiency of government operations.

‍