Hughes Telematics, Inc., a leader in the high growth telematics
industry, and Polaris Acquisition Corp., a Special Purpose
Acquisition Corporation (�Polaris�) (AMEX: TKP.U), have signed a
definitive merger agreement in an all-stock transaction valued at
approximately $700 million. The transaction provides Polaris
investors with a unique opportunity to participate in a rapidly
growing technology and services company that is poised for strong
recurring revenues and earnings. The transaction provides Hughes
Telematics with access to added resources, including an additional
$140 million in capital to fund the company�s growth opportunities.
This capital is in addition to the approximately $90 million
invested to date by an affiliate of Apollo Management L.P.
(�Apollo�). Apollo, which will maintain its current stake in Hughes
Telematics, has agreed, along with management and other Hughes
Telematics shareholders, to a two-year lock-up and will continue to
play an important role in guiding the Company�s management team. In
addition, the founders of Polaris have a 1 year lockup in a further
showing of confidence in this transaction. Hughes Telematics has
established its leadership position through long-term contracts
with Chrysler Group and Mercedes-Benz USA, both of which are
expected to begin implementing the Hughes Telematics solution in
the second half of 2009 with the solution expected to be standard
in nearly all of their U.S. production by 2012. Hughes Telematics
Positioned at the Forefront of a Rapidly Growing Industry Hughes
Telematics is one of the leaders in automotive telematics, a
fast-growing technology enabled services industry that is expected
to reach $30 billion in annual revenue within a decade. Automotive
telematics is a set of systems that leverage and integrate Global
Positioning Systems, on and off board computers, and other
communications technologies, the functionality and combination of
which radically transform the driving experience by remotely
connecting drivers, passengers, auto manufacturers, dealers and
other vested third parties with a wide range of safety, service,
information and entertainment options. Every day over 650 million
people worldwide spend a significant amount of time in their
vehicles. Automakers are contracting with Hughes Telematics to
create user-friendly computerized dashboard displays and implement
advanced, contextual voice recognition systems, through which
drivers will be able to control personal devices such as MP3
players, download content, read, receive and respond via voice to
e-mail, navigate in real time to connect with valuable points of
interest, and much more. �Hughes Telematics is making the
possibility of a truly �connected car� a reality,� said Jeff Leddy,
CEO of Hughes Telematics. �Because of our unique systems and
innovative technology, our product and service offerings are
gaining significant interest in the automotive industry. We have
been recognized throughout the industry for developing what we
believe to be the best, most flexible approach to telematics. As
the industry evolves, we are committed to continually innovating
ways to add daily value for drivers using our telematics system.
Drivers, fleet managers, auto manufacturers, dealers and other
third parties will all benefit from being connected real time to
the vehicle. Over the next decade, tens of millions of new vehicles
are expected to come equipped with a telematics offering and since
Hughes Telematics offers a seamless, all-encompassing telematics
solution, we are excited about our prospects of gaining additional
and significant market traction.� Hughes Telematics was recently
awarded the �Best Embedded Telematics Service� at the awards
program for the 8th Annual Telematics Detroit 2008 Conference &
Exhibition, the world's largest and most prestigious telematics
conference. U.S. consumer adoption of telematics services is
expected to almost double from 16.2 million users in 2009 to 30.6
million in 2011, according to Visant Strategies, a marketing
research firm that focuses on emerging and wireless technologies.
�Most drivers spend multiple hours each day in their cars and we
know that they want information, convenience, and the ability to
stay connected to their families and their office. They also want
features and services which ensure their safety and security. Our
products and services are being designed to provide all of these
solutions, seamlessly, cost effectively and in a user friendly way.
This will be accomplished through a robust end-to-end solution,
leveraging multiple innovations from the Hughes family of
companies,� Leddy said. Mr. Leddy continued, �Our long-term
contracts with Chrysler Group and Mercedes-Benz USA clearly
underscore the importance that telematics represents for auto
manufacturers, particularly as increasing numbers of consumers
demand more integrated and interactive safety, convenience,
information and entertainment options in their vehicles. We believe
that our OEM partnerships position us to generate strong free cash
flow as subscription services ramp up commensurately with factory
installs in several million vehicles in the coming years. Our team
is also very focused on our continuing discussions with many other
relevant auto manufacturers around the world, each of which is
seeking innovative and differentiating solutions for their
customers. We believe that a large majority of auto manufacturers
are in the process of making strategic decisions about their
telematics solutions and we are well positioned to grow our market
share as these decisions come to maturity.� Transaction Cements
Hughes Telematics Position; Offers Investors Compelling Growth
Opportunities Mr. Leddy added, �This transaction expands our
shareholder base beyond Apollo and provides Hughes Telematics with
additional resources. With access to significant capital and the
public markets, as well as the deep marketing experience of the
Polaris management team, we have the resources in place to propel
the company forward and further deepen our business among
manufacturers, dealers and consumers. This transaction is a
validation of our business model by sophisticated and seasoned
investors from Polaris and Apollo, both of which have a tremendous
amount of experience in uncovering high value investing
opportunities.� Apollo is a leading private equity firm with a long
track record of success in technology investments. Apollo has been
an early and ongoing investor in Hughes Telematics, having invested
approximately $90 million in capital to finance the product and
technology solution development and deployment. Apollo will
maintain its current stake in the company and continue to play an
important role in guiding the Hughes Telematics management team.
Marc Byron, Chairman and CEO of Polaris stated �We promised our
investors that we would methodically and quickly identify a
consumer facing services company with great growth prospects. In
merging with Hughes Telematics, we believe that we delivered on our
promise. First, we are merging with a company in a rapidly growing
industry. At the same time, Hughes Telematics has long-term
contracts already in place that we believe provide financial
stability. We believe we are investing in Hughes Telematics at the
inflection point of the Company�s evolution, much of which is
anticipated to come in the form of predictable, recurring revenues.
Second, there are no selling shareholders in this transaction,
validating our belief that the company is poised to create
meaningful value going forward, especially as revenue and earnings
scale with the installations expected in virtually all Mercedes and
Chrysler vehicles in the U.S. in the coming few years. Third, the
transaction merges the technology and engineering skills of the
Hughes Telematics team with the marketing and customer retention
skills of the Polaris team.� Byron added, �The structure of the
all-equity transaction, including an earn-out component for
management, ensures that all parties are completely aligned and
focused on the long-term success of the business.� Details of the
Transaction The transaction provides for a direct merger of Hughes
Telematics and Polaris. Under the terms of the agreement, the
shareholders of Hughes Telematics will receive approximately 45
million shares of Polaris common stock at the closing of the
transaction, subject to certain adjustments, and they will be
eligible to receive up to 29 million additional shares of Polaris
common stock upon the achievement of certain stock price targets in
the subsequent five years based on approximately 25% compounded
annual growth in the Polaris stock price. Hughes shareholders are
expected to initially own approximately 65% of the fully diluted
equity of the combined company, and the Hughes Telematics
management team, with significant experience in telematics,
satellite radio, wireless, automotive and entrepreneurial
initiatives, will continue to manage the company. Stockholders of
Hughes Telematics will further align their interests with the
public stockholders of Polaris by agreeing not to transfer their
shares of Polaris for two years. The transaction is expected to be
completed during the first quarter 2009 pending Polaris stockholder
approval, regulatory approval, and other customary closing
conditions. Lazard is serving as financial advisor to Polaris, and
Pali Capital is serving as financial advisor to Hughes Telematics.
Legal counsel to Polaris is Wachtell, Lipton, Rosen & Katz,
while legal counsel to Hughes Telematics is Skadden, Arps, Slate,
Meagher & Flom LLP. Duff & Phelps provided an opinion to
the Polaris Board that the transaction was fair to Polaris from a
financial point of view. Additional information regarding the
transaction as well as Hughes Telematics operations and historical
financial information will be contained in an investor presentation
to be made public and filed by Polaris with the Securities and
Exchange Commission today. For more information on the transaction,
visit www.HTIPolaris.com About Polaris Acquisition Corporation
Polaris Acquisition Corporation is a special purpose acquisition
company formed for the purpose of acquiring a growing
subscription-based business or assets. Polaris went public on
January 17, 2008 and trades on the AMEX under the ticker �TKP.U�.
For more information, visit www.polarisacq.com About Hughes
Telematics Hughes Telematics is an Atlanta-based automotive
technology solutions company that provides consumers with an
extensive line of in-vehicle telematics. Hughes is majority owned
by Apollo management, a leading private equity firm, which also
manages various enterprises in the telecommunications sector
including Hughes Network Systems, LLC, a service provider to Hughes
Telematics. Hughes Telematics� existing assets also include
wholly-owned subsidiary Networkcar, Inc. The San Diego, CA based
company is a leader in remote vehicle diagnostics, and offers an
integrated GPS tracking and diagnostic monitoring system for
wireless vehicle management. For more information, visit
www.hughestelematics.com. Conference Call Hughes Telematics and
Polaris Acquisition Corp. will host a conference call on Monday,
June 16, 2008 at 10 a.m. Eastern Time (ET) to discuss the
transaction. The call will be open to the public. All interested
parties should dial (800) 370-0740 (within the U.S.) or (973)
935-8758 (outside the U.S.) 10 to 15 minutes prior to the scheduled
start of the call. The conference call ID is 51572193. For those
unable to listen to the live broadcast, a replay will be available
by dialing (800) 642-1687 (within the U.S.) or (706) 645-9291
(outside the U.S.) approximately two hours after the event. The
conference call ID is 51572193. Participants can also access the
teleconference via webcast available at https://www.HTIPolaris.com.
This press release includes "forward-looking statements" within the
meaning of the safe harbor provisions of the United States Private
Securities Litigation Reform Act of 1995. Words such as "expect,'
"estimate," "project," "budget," "forecast," "anticipate,"
"intend," "plan," "may," "will," "could," "should," "believes,"
"predicts," "potential," "continue," and similar expressions are
intended to identify such forward-looking statements. These
forward-looking statements include, without limitation, Polaris'
and Hughes Telematics' expectations with respect to future
performance, anticipated financial impacts of the merger
transaction and related transactions; approval of the merger
transaction and related transactions by shareholders; the
satisfaction of the closing conditions to the merger transaction
and related transactions; and the timing of the completion of the
merger transaction and related transactions. These forward-looking
statements involve significant risks and uncertainties that could
cause the actual results to differ materially from the expected
results. Most of these factors are outside our control and
difficult to predict. Factors that may cause such differences
include, but are not limited to, the possibility that the expected
growth will not be realized, or will not be realized within the
expected time period, due to, among other things, (1) the
telematics environment; (2) competitive actions taken by automotive
manufacturers or other telematics firms; (3) general economic
conditions; (4) actions taken or conditions imposed by the United
States and foreign governments; and (5) the willingness of
customers to use the services. Other factors include the
possibility that the merger does not close, including due to the
failure to receive required stockholder or regulatory approvals, or
the failure of other closing conditions. Polaris and Hughes
Telematics caution that the foregoing list of factors is not
exclusive. Additional information concerning these and other risk
factors is contained in Polaris' most recent filings with the
Securities and Exchange Commission ("SEC"). All subsequent written
and oral forward-looking statements concerning Hughes Telematics,
Polaris, the merger, the related transactions or other matters and
attributable to Polaris or Hughes Telematics or any person acting
on their behalf are expressly qualified in their entirety by the
cautionary statements above. Hughes Telematics and Polaris do not
undertake any obligation to update any forward-looking statement,
whether written or oral, relating to the matters discussed in this
news release. Additional Information about the Merger and Where to
Find It In connection with the proposed merger, Polaris will file
with the Securities and Exchange Commission (�SEC�) a proxy
statement. Polaris will mail the proxy statement to its
stockholders. Polaris urges investors and security holders to read
the proxy statement regarding the proposed merger when it becomes
available because it will contain important information. You may
obtain copies of all documents filed with the SEC regarding this
transaction, free of charge, at the SEC�s website (www.sec.gov).
Polaris and its directors, executive officers and certain other
members of management and employees may be soliciting proxies from
Polaris stockholders in favor of the merger. Information regarding
the persons who may, under the rules of the SEC, be deemed
participants in the solicitation of Polaris stockholders in
connection with the proposed merger will be set forth in the proxy
statement when it is filed with the SEC. You can find information
about Polaris�s executive officers and directors in its Prospectus,
current Reports on Form 8-K and other documents that have
previously been filed with the SEC.
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