UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE
14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant
x
Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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x
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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EASYLINK
SERVICES INTERNATIONAL CORPORATION
(Name of Registrant as Specified in its
Charter)
(Name of Person(s) Filing Proxy Statement,
if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x
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No fee required.
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¨
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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¨
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Fee paid previously with preliminary materials.
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¨
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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EASYLINK SERVICES INTERNATIONAL CORPORATION
6025 The Corners Parkway, Suite 100
Norcross, Georgia 30092
(678) 533-8000
SUPPLEMENT TO THE PROXY STATEMENT FOR
THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 2, 2012
This supplement, which we refer to as the
proxy supplement, amends and supplements the definitive proxy statement, which we refer to as the proxy statement, initially filed
with the U.S. Securities and Exchange Commission (the “SEC”) on June 6, 2012 by EasyLink Services International Corporation,
a Delaware corporation, which we refer to as the Company, we, our or us, for a special meeting of stockholders of the Company to
be held on July 2, 2012, at 10:00 a.m., Eastern Standard Time, at the Company’s offices at 6025 The Corners Parkway, Suite
100, Norcross, Georgia 30092. The purpose of the special meeting is to consider and vote upon, among other things, a proposal to
adopt the Agreement and Plan of Merger, dated as of May 1, 2012, as it may be amended from time to time, which we refer to as the
merger agreement, by and among the Company, Open Text Corporation, a Canadian corporation, which we refer to as Open Text, and
Epic Acquisition Sub Inc., a Delaware corporation and an indirect wholly-owned subsidiary of Open Text, which we refer to as Merger
Sub, providing for the merger of Merger Sub with and into the Company, which we refer to as the merger, with the Company being
the surviving corporation of the merger. Following the merger, the Company will be an indirect wholly-owned subsidiary of Open
Text.
After careful consideration and consultation
with its legal and financial advisors, the board of directors of the Company has unanimously approved the merger agreement and
declared it to be advisable, fair to and in the best interests of the Company and its stockholders. The board of directors of the
Company unanimously recommends that you vote “FOR” approval of the proposal to adopt the merger agreement, “FOR”
approval of the nonbinding advisory proposal regarding “golden parachute” compensation and “FOR” approval
of the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies.
If you have not already submitted a proxy
for use at the special meeting you are urged to do so promptly. No action in connection with this proxy supplement is required
by any stockholder who has previously delivered a proxy and who does not wish to revoke or change that proxy.
The information contained herein speaks
only as of June 22, 2012 unless the information specifically indicates that another date applies.
SUPPLEMENT TO PROXY STATEMENT
The Company is making the following supplemental
disclosures to the proxy statement. These disclosures should be read in connection with the proxy statement, which should be read
in its entirety. This proxy supplement is not intended to and does not update the disclosures contained in the proxy statement,
which were made as of June 6, 2012 except where the information in the proxy statement specifically indicated that another
date applied. Defined terms used but not defined herein have the meanings set forth in the proxy statement. Page numbers referenced
herein correspond to page numbers in the proxy statement mailed to stockholders of the Company. Without admitting in any way that
the disclosures below are material or otherwise required by law, the Company makes the following supplemental disclosures:
The section of the proxy statement entitled “
The
Merger—Background of the Merger
” beginning on page 27 is supplemented as set forth below:
“Of the 37 potential acquirers contacted
by William Blair during the period from January 16 to February 23, 2012, 13 were strategic potential acquirers and 24 were
financial potential acquirers.
The board invited Mr. Kaminsky to participate
in the board’s discussions because of his experience as a former investment banker and his knowledge of the Company. The
board never contemplated retaining Mr. Kaminsky in connection with the strategic review or any potential transaction, and Mr. Kaminsky
was never retained by the board or the Company in connection with the strategic review or any potential transaction, received no
compensation for his involvement and had no affiliation with any of the Company’s management.
The board felt that William Blair was better
positioned than Banker A to advise the Company regarding a wide range of potential strategic alternatives for the Company in part
because Banker A was primarily focused on providing sell-side related services to its clients.”
The section of the proxy statement entitled “
The
Merger—Opinion of William Blair—Selected Public Company Analysis
” beginning on page 38 is supplemented as
set forth below:
“The following table discloses the
enterprise value of each selected public company as a multiple of its revenue and adjusted EBITDA for the LTM and estimates of
its revenue and adjusted EBITDA for calendar years 2012 and 2013:
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Valuation Multiple: Revenue
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Valuation Multiple: Adjusted EBITDA
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Company
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LTM
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Calendar
Year 2012
Estimate
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Calendar
Year 2013
Estimate
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LTM
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Calendar
Year 2012
Estimate
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Calendar
Year 2013
Estimate
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Amdocs Limited
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1.44
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x
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1.37
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x
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1.31
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x
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7.3
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x
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6.5
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x
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6.5
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x
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Cbeyond, Inc.
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0.41
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x
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0.40
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x
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0.40
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x
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2.3
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x
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2.3
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x
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2.3
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x
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IntraLinks Holdings, Inc.
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1.32
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x
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1.41
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x
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1.33
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x
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7.5
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x
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5.8
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x
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5.7
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x
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j2 Global, Inc.
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3.06
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x
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2.85
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x
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2.71
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x
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6.1
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x
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5.5
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x
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5.2
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x
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Premiere Global Services, Inc.
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1.30
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x
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1.25
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x
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1.18
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x
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7.3
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x
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7.0
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x
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6.4
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x
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TNS Inc.
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1.53
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x
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1.47
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x
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1.39
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x
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6.0
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x
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5.9
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x
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5.6
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x”
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The section of the proxy statement entitled “
The
Merger—Opinion of William Blair—Selected Precedent Transactions Analysis
” beginning on page 39 is supplemented
as set forth below:
“The following table discloses the
enterprise value of each target in the selected precedent transactions as a multiple of the target’s revenue and adjusted
EBITDA for the LTM prior to the announcement of the relevant transaction:
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Enterprise Value
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Announcement
Date
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Target/
Acquirer
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Enterprise
Value
($ millions)
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LTM
Revenue
Multiple
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LTM
Adjusted
EBITDA
Multiple
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October 2010
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PGiSend and PGINotify business of Premiere Global Services, Inc./
EasyLink Services International Corporation
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106.8
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0.85
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x
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5.6
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x
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September 2010
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Venali, Inc./
j2 Global, Inc.
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17.0
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1.7
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x
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NA
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(1)
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May 2010
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Sterling Commerce, Inc./
International Business Machines Corporation
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1,415.0
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2.64
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NA
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(1)
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December 2009
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Inovis, Inc./
GXS, Inc.
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279.2
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2.06
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x
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6.3
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x
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August 2009
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Messaging business of VeriSign, Inc./
Syniverse Holdings, Inc.
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174.5
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1.25
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x
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5.0
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x
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May 2009
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Vignette Corp./
Open Text Corporation
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166.4
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1.05
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x
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14.9
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x
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March 2009
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Communications Services Group of VeriSign, Inc./
TNS Inc.
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230.7
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1.01
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x
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3.5
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x
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September 2008
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Captaris Inc./
Open Text Corporation
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101.6
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0.83
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x
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NMF
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(2)
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June 2008
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Tumbleweed Communications Corporation/
Axway Inc.
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112.8
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1.95
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x
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NMF
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(2)
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(1)
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Information not available.
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(2)
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Not meaningful figure.”
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The section of the proxy statement entitled “
The
Merger—Opinion of William Blair—Discounted Cash Flow Analysis
” beginning on page 40 is supplemented as set
forth below:
“William Blair calculated forecasted
free cash flow for each relevant period by beginning with the Company’s projected adjusted EBITDA for the period, subtracting
projected extraordinary legal expenses, taxes, capital expenditures and changes in current assets for the period, and adding projected
changes in current liabilities for the period. ‘Operating Income’ as currently disclosed in the proxy statement is
taxable income for purposes of calculating the amount of taxes in the calculation of free cash flow.
William Blair’s discounted cash flow
analysis assumed that the Company had U.S. federal tax loss carry-forwards as of April 30, 2012 of $52.5 million based upon estimates
provided by the Company. William Blair’s discounted cash flow analysis accounted for such tax loss carry-forwards.
For purposes of determining the range of
diluted implied equity value per share for the Company, excess cash equaled all cash as of January 31, 2012.”
The last sentence in the fourth paragraph
on page 40 of the proxy statement is amended in its entirety to read as follows:
“
The diluted
equity value implied by the discounted cash flow analysis ranged from $6.94 per share to $8.11 per share based on a range of terminal
values derived by multiples of adjusted EBITDA and from $5.56 per share to $8.16 per share based on a range of terminal values
derived by perpetuity growth rates.”
The section of the proxy statement entitled “
The
Merger—Opinion of William Blair—Leveraged Acquisition Analysis
” beginning on page 40 is supplemented as set
forth below:
“The levels of debt used in performing
the leveraged acquisition analysis ranged from 3.25 to 3.75 times projected adjusted EBITDA for the 12-month period ending April
30, 2012, and the cost of debt was assumed to be the projected London Interbank Offered Rate, or LIBOR, plus 550 basis points,
but not less than 7.5%.
William Blair’s leveraged acquisition
analysis assumed that the Company had U.S. federal tax loss carry-forwards as of April 30, 2012 of $52.5 million based upon estimates
provided by the Company and that the availability of such tax loss carry-forwards would be subject to annual limitations under
Section 382 of the Internal Revenue Code of 1986, as amended.”
The section of the proxy statement entitled “
The
Merger—Certain Projections
” beginning on page 42 is supplemented as set forth below:
“The following table sets forth certain
additional summary items from the financial projections:
Financial Projections
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2H2012
(1)
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FY2013
(2)
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FY2014
(2)
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FY2015
(2)
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FY2016
(2)
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Tax Rate
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39
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%
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39
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%
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39
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%
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39
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%
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39
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%
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Changes in Current Assets
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$
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(677,129
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)
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$
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(480,587
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$
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(20,477
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)
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$
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(193,916
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)
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$
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(512,612
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Changes in Current Liabilities
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(258,150
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)
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82,593
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4,346
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(79,059
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)
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(245
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Capital Expenditures
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1,620,352
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3,500,000
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3,500,000
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3,500,000
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3,500,000
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Extraordinary Legal Expense
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2,340,000
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3,541,094
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3,247,954
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3,257,894
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2,962,676
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(1)
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Information reflects the Company’s last two fiscal quarters for the Company’s fiscal year ending on July 31, 2012.
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(2)
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Fiscal year information reflects the Company’s fiscal year ending on July 31 in the year noted.”
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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING
INFORMATION
This proxy supplement, and the documents
to which we refer you in this proxy supplement, as well as information included in oral statements or other written statements
made or to be made by us, contain a number of “forward-looking statements” which the Company intends to be covered
by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Specifically, all statements other than statements of historical facts included in this proxy supplement regarding the timing or
likelihood of completing the merger, our financial position, business strategy and plans and objectives of management for future
operations are forward-looking statements. These forward-looking statements are based on the beliefs of management, as well as
assumptions made by and information currently available to management. When used in this proxy statement, the words “anticipate,”
“believe,” “estimate,” “expect,” “may,” “should,” “could,”
“would,” “will,” “hope,” “plan,” “contemplate,” “continue”
and “intend,” and words or phrases of similar import, as they relate to the timing or likelihood of completing the
merger, our financial position, business strategy and plans, or objectives of management, are intended to identify forward-looking
statements.
Our forward-looking statements reflect our
current view with respect to future events and are subject to a number of known and unknown risks and uncertainties that could
cause actual results, performance or achievements to differ materially from those described or implied in the forward-looking statements,
including, but not limited to, general economic and business conditions (including the current worldwide economic downturn and
disruption in financial and credit markets); weakness in demand for our services from our financial services market customers;
challenges in developing new services for sale to our customers; risks related to data security and privacy; the need to maintain
or replace our existing VAN interconnect arrangements; the risk of failures by third party service providers on whom we rely to
provide our services; potential service interruptions due to failures by our internal service production systems; risks related
to intellectual property rights and disputes; future assessments for unaccrued international, federal, state and local income and
sales taxes; government regulation and legal uncertainties relating to the Internet and other telecommunication services; any significant
variations between actual amounts and the amounts estimated for those matters identified as our critical accounting estimates as
well as other significant accounting estimates made in the preparation of our financial statements; and the economic impact of
geopolitical concerns. Accordingly, actual results may differ materially from such forward-looking statements.
Additional information about these factors
and about the material factors or assumptions underlying such forward-looking statements may be found in the proxy statement, under
Item 1A in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2011, under Item 1A in the
Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2012, and in our registration statements and
other periodic reports filed with the SEC under the Exchange Act. The Company cautions that the foregoing list of important factors
that may affect future results and the factors contained in our SEC filings are not exhaustive. When relying on forward-looking
statements to make decisions with respect to the proposed transaction, stockholders and others should carefully consider the foregoing
factors and other uncertainties and potential events. All subsequent written and oral forward-looking statements concerning the
proposed transaction or other matters attributable to the Company or any other person acting on its behalf are expressly qualified
in their entirety by the cautionary statements referenced above. The forward-looking statements contained in this proxy supplement
speak only as of the date of this proxy supplement. The Company undertakes no obligation to update or revise any forward-looking
statements for any reason, even if new information becomes available or other events occur in the future, except as may be required
by law.
WHERE
YOU CAN FIND MORE INFORMATION
In connection with the proposed merger,
the Company filed the proxy statement with the SEC and first mailed the proxy statement to stockholders on or about June 6, 2012.
BEFORE MAKING ANY VOTING DECISION, STOCKHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT, ALL RELATED SUPPLEMENTS AND
ALL OTHER RELATED MATERIALS CAREFULLY BECAUSE THEY CONTAIN (AND WILL CONTAIN) IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER AND
RELATED MATTERS.
Any person, including any beneficial owner of shares of Company common stock, to whom this proxy statement
is delivered may request copies of this proxy supplement and the proxy statement and any of the documents incorporated by reference
in this proxy supplement or the proxy statement or other information concerning us by written or telephonic request directed to
the Company’s Secretary, John A. Harwood, at 6025 The Corners Parkway, Suite 100, Norcross, Georgia 30092, telephone (678)
533-8005, by telephonic request directed to our proxy solicitor, Georgeson Inc., at (866) 729-6811 (toll free) or (212) 440-9800
(call collect) or from the SEC through the SEC website at the address provided above. Documents incorporated by reference are available
without charge, excluding any exhibits to those documents unless the exhibit is specifically incorporated by reference into those
documents.
Easylink Services International Corp. - Class A (MM) (NASDAQ:ESIC)
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