EssEssig Research Inc. agreed to acquire PLM Product Line from SofTech, Inc., Workgroup Technology Corporation and Information Decisions, Inc.
August 23, 2016
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EssEssig Research Inc. agreed to acquire PLM Product Line from SofTech, Inc. (OTCPK:SOFT), Workgroup Technology Corporation and Information Decisions, Inc on August 24, 2016. Under the terms of the agreement Essig Research will pay $3.25 million plus contingent payments based on revenue in the two years immediately following the closing of the transaction. In the first twelve month period, if the revenue exceeds $3.2 million the contingent payment would equal $0.075 million plus 12.5% of any amount in excess of $3.275 million. The same formula applies for the second year except the revenue threshold for that period is $3.75 million. Under the terms Essig Research will deposit $0.1625 million in escrow as per the escrow agreement to be negotiated by the parties, $1.15 million of softech's debt will be waived off and SofTech will repurchase 0.11 million shares from Joseph P. Daly. In the event of termination of agreement in case of superior offer Essig shall be paid a fee of $0.2 million, payable as follows, $0.05 million immediately upon acceptance of the superior offer and $0.15 million pursuant to a promissory note in form and substance acceptable to Essig.
The transaction is subject to the approval of SofTech’s shareholders, third party approvals, execution of license agreement, services agreement, assignment agreement for registered trademarks and escrow agreement and other customary closing conditions. SofTech’s Board of Directors has unanimously approved the transaction and recommended that the Company’s shareholders vote in favor of the transaction. The transaction is not subject to any financing condition. The acquisition is expected to occur by October 2016. Adam D. Page of Finneran & Nicholson, P.C. acted as legal advisor for Softech.
SofTech, Inc. is engaged in the development, marketing, distribution and support of computer software solutions that enable companies to manage the lifecycle of their products from conception through design and manufacture, to service and disposal. The Company's service offerings include consulting, training and discrete engineering services. These solutions include software technology offerings for computer aided design (CAD), and product data management (PDM) and collaboration technologies. In addition, the Company offers a technology platform that allows data exchange between various third party technology offerings known as the Company's connector offering. The Company's products include ProductCenter, Connector Platform, HomeView and CADRA. The Company operates in the United States and Europe and has sales and customer support offices in the United States and Italy. The Company also operates through re-sellers in North America, Europe and Asia.