Constellation Software Inc. agreed to Spin-Off 25.1% stake in Lumine Group Inc.
December 11, 2022
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The board of Constellation Software Inc. (TSX:CSU) intend to spin-off 25.1% stake in Lumine Group Inc. on December 12, 2022. In addition, Constellation announced that a preliminary prospectus has been filed in all provinces and territories of Canada in connection with the proposed distribution of the shares of Lumine Group Inc. which entity is expected to be spun out of Constellation and will operate as a separate publicly traded company. Under the proposed transaction structure, Constellation will remain the majority shareholder of Lumine Group and will distribute to the current Constellation shareholders, pro rata and by way of a dividend-in-kind, nominal value subordinate voting shares of Lumine Group. In related transaction, Constellation Software Inc and Lumine Group Inc announced that they have entered into a binding agreement and plan of merger with WideOrbit Inc. (WideOrbit), a U.S.-based media vertical market software provider. Following the Spin-Out and the Acquisition CSI will indirectly own a 61.05% interest in the Company and the CSI Shareholders (as defined herein) will own a 25.12% interest in the Company, in each case on a fully-diluted basis and WideOrbit will become a wholly owned subsidiary within Lumine Group and will operate as an autonomous business unit within the Lumine Groups portfolio of companies. The spin out and listing are subject to the approval of the TSX Venture Exchange and acceptance of a final prospectus by the Canadian securities regulatory authorities. A record date for the distribution of the dividend-in-kind will be set at a later date. On February 6, 2023, Constellation announced today that it has filed and obtained a receipt for a final prospectus with the securities regulatory authorities in each of the provinces and territories of Canada in connection with the proposed spin-out. As of February 9, 2023, Paul Cowling and Lucie Laplante, two independent directors, joined Lumine Group's current board.
The Spin-Out Shares have been conditionally approved for listing on the TSX Venture Exchange, subject to Lumine Group fulfilling all of the listing requirements. Trading of the Spin-Out Shares on the TSX Venture Exchange is expected to begin approximately 30 days following completion of the acquisition of WideOrbit. The Record date is February 16, 2023. Constellation also announced a special dividend, under which all common shareholders will receive 3.0003833 subordinate voting shares of Lumine Group for each Constellation share held. The common shares of Constellation commenced trading on an ex-dividend basis at the opening of markets on February 15, 2023. The payment date for the dividend is scheduled for February 23, 2023.
Constellation Software Inc. is a provider of software and services to a select group of public and private sector markets. The Company acquires, manages, and builds vertical market software (VMS) businesses, which provide specialized, mission-critical software solutions that address the specific needs of its customers. It is engaged principally in the development, installation, and customization of software as well as in the provisioning of related professional services and support for customers globally. It sells on-premises software licenses on both a perpetual and specified-term basis. It has six operating groups, which service customers in over 100 different markets around the world. The six operating groups include Volaris, Harris, Topicus, Vela, Jonas, and Perseus Group. The Companyâs products include Empower LOS, Optimal Blue, NOVA LOS, Reverse Vision, and Axacore. It operates in three principal geographical areas, Canada, the United States, and the United Kingdom/Europe.