Kontron America, Inc. enter into a definitive merger agreement to acquire BSQUARE Corporation (NasdaqCM:BSQR) for $38 million on October 11, 2023. Under the terms of the agreement, Kontron will commence a tender offer for all outstanding shares of Bsquare for $1.90 per share of common stock in an all-cash transaction. The offer price represents a 62% premium to the trailing 52-week volume weighted average of Bsquare?s closing stock prices as of October 10, 2023. Upon the successful completion of the tender offer, Kontron would acquire any untendered shares of Bsquare?s common stock through a second-step merger effected for the same per common share consideration. The Offer will remain open for 20 business days from the commencement of the Offer, subject to possible extensions on the terms set forth in the Merger Agreement. If Kontron America achieves an ownership of 90% or greater of the outstanding Shares through the Offer, Merger Sub has agreed that it will then effect the Merger in accordance with the ?short-form? merger procedures under the applicable provisions of the Business Corporation Act of the State of Washington, and each Share (other than Shares owned directly or indirectly by the Company, Parent or Merger Sub) will thereupon be cancelled and converted into the right to receive cash in an amount equal to the Offer Price, on the terms and subject to the conditions set forth in the Merger Agreement. After closing, Bsquare will become a privately held company, and shares of Bsquare common stock will no longer be listed on any public market. The Merger Agreement also provides for certain termination rights for both the Company and Kontron. Upon the termination of the Merger Agreement under certain circumstances, a termination fee of $1.25 million may be required to be paid by either the Company or Kontron.

The closing of the transaction will be subject to customary conditions, including the expiration or termination of certain regulatory periods and the tender of at least two-thirds of Bsquare?s outstanding common stock in the tender offer. The transaction has been approved unanimously by the board of directors of both companies. The transaction is expected to close later in 2023.

Barnes & Thornburg LLP serves as Kontron?s legal advisor. Telegraph Hill BD LLC, the broker-dealer subsidiary of Telegraph Hill Advisors, LLC, is acting as financial advisor and fairness opinion to Bsquare. DLA Piper LLP (US) serves as Bsquare?s legal advisor.