Ember Therapeutics (CE) (USOTC:EMBT)
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Embarcadero Technologies, Inc. (NASDAQ: EMBT) today announced that it is
making available additional information to its stockholders relating to
Embarcadero’s proposed merger with an
affiliate of Thoma Cressey Bravo, Inc. As previously announced, on April
5, 2007, Embarcadero entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with EMB Holding Corp., a
Delaware corporation (“Parent”)
and EMBT Merger Corp., a Delaware corporation and wholly-owned
subsidiary of Parent (“Merger
Sub”), pursuant to which Merger Sub
will merge with and into Embarcadero, and Embarcadero will survive as a
wholly-owned subsidiary of Parent. Parent and Merger Sub are affiliates
of Thoma Cressey Bravo, Inc. (“TCB”).
On May 24, 2007, Embarcadero filed a definitive proxy statement (the “Final
Proxy”) with the Securities and
Exchange Commission (“SEC”)
in connection with the Merger. The Final Proxy was first mailed to
stockholders on or about May 31, 2007. Embarcadero is now making
available additional information to its stockholders relating to the
Merger. The additional information is contained below in this press
release and should be read in conjunction with the Final Proxy. There
has been no change to the merger consideration to be paid to
stockholders of Embarcadero in connection with the Merger and there has
been no change to the timing of the special meeting of stockholders of
Embarcadero scheduled for Friday, June 22, 2007, at 10:00 a.m., local
time, at Embarcadero’s principal executive
offices located at 100 California Street, 12th Floor, San Francisco,
California 94111. The special meeting of stockholders has been called
for the purpose of voting on a proposal to adopt the Merger Agreement.
The following information should be read in conjunction with the Final
Proxy mailed to Embarcadero’s stockholders on
or about May 31, 2007:
Information Relating to the Impact of the Merger on Stockholder
Derivative Claims
If the proposal to adopt the Merger Agreement is approved by Embarcadero’s
stockholders at the special meeting and the Merger is completed, all
stockholder derivative claims, including claims arising out of
Embarcadero’s historical stock option
practices and related accounting, would likely be extinguished.
Information Relating to the Background to the Merger
As disclosed in the Final Proxy, Morgan Stanley & Co. Incorporated (“Morgan
Stanley”) served as the financial
advisor to Embarcadero’s board of directors
in connection with the Merger. To the best of Morgan Stanley’s
knowledge, Morgan Stanley has never been engaged by TCB on an assignment
and has never been paid an investment banking fee by TCB.
As disclosed in the Final Proxy, Embarcadero and TCB entered into a
previous merger agreement in September 2006 whereby TCB was to acquire
Embarcadero for a purchase price of $8.38 per share of Embarcadero
common stock. Also as disclosed in the Final Proxy, between then and
when TCB made its offer to acquire Embarcadero for a purchase price of
$7.20 per share in April 2007, Embarcadero had experienced two quarters
(the fourth quarter of 2006 and the first quarter of 2007) in which
revenues were significantly lower than expected, and Embarcadero’s
Board of Directors had concerns regarding the potential for lower
revenues for the balance of fiscal 2007 in light of these lower revenue
results. The Board of Directors made its decision to approve the Merger
Agreement and recommend its adoption by Embarcadero’s
stockholders in the context of these significant changes in Embarcadero’s
financial performance and potential prospects.
Information Relating to the Opinion of Morgan Stanley & Co.
Incorporated
Under the terms of its engagement letter with Embarcadero, Morgan
Stanley provided Embarcadero with financial advisory services and a
fairness opinion in connection with the Merger, and Embarcadero agreed
to pay Morgan Stanley a fee of approximately $3.0 million for its
services. Morgan Stanley was paid a total of $500,000 prior to or upon
the execution of the Merger Agreement, with the remaining balance
contingent upon the closing of the Merger.
Trading Range Analysis. Morgan Stanley noted that the trading
range for Embarcadero’s common stock for the
twelve month period up to and including April 5, 2007, but excluding the
period in which Embarcadero and TCB were parties to a previous merger
agreement entered into in September 2006, was $5.40 to $7.60. This
trading range of $5.40 to $7.60 excludes historical prices affected by
either (i) the announcement of the previous merger agreement with TCB
and (ii) the announcement of Chapman Capital’s
investment in Embarcadero.
Analysis of Precedent Transactions. On October 24, 2006,
Embarcadero filed a definitive proxy statement with the SEC in
connection with a previous merger agreement entered into in September
2006 (the “Previous
Proxy”). The Previous Proxy included a
description of a fairness opinion given by Morgan Stanley dated as of
September 6, 2006, which included a precedent transaction analysis.
Certain transactions included in Morgan Stanley’s
analysis of precedent transactions that was included in the Final Proxy
were announced after September 6, 2006, and therefore were not included
in Morgan Stanley’s analysis of precedent
transactions included in the Previous Proxy.
Leveraged Buyout Analysis. Incorporated in Morgan Stanley’s
Leveraged Buyout Analysis included in the Final Proxy are projections of
Embarcadero’s revenue and EBITDA through
2011. These projections reflect the Revised Management Case and
Sensitivity Case for 2007 and extrapolations to each of these cases for
periods thereafter, as developed by Morgan Stanley. The projections
exclude certain costs related to Embarcadero’s
status as a public company. The projections are as follows:
Revised Management Case ($MM)
Year
Revenue
EBITDA
2007
$60.2
$17.4
2008
$62.0
$19.2
2009
$63.8
$19.8
2010
$65.7
$20.4
2011
$67.7
$21.0
Sensitivity Case ($MM)
Year
Revenue
EBITDA
2007
$58.2
$16.0
2008
$59.9
$18.0
2009
$61.7
$19.1
2010
$63.6
$19.7
2011
$65.5
$20.3
Note: The 2007 through 2011 projections were developed by
Morgan Stanley as extrapolations with guidance from Embarcadero’s
management, but were not prepared by Embarcadero’s
management.
Any projections contained herein were necessarily based on financial,
economic, market and other conditions as in effect on, and the
information that was made available to, Morgan Stanley as of April 5,
2007, the date of Morgan Stanley’s fairness
opinion. Morgan Stanley made numerous assumptions with respect to
industry performance, general business and economic conditions and other
matters. Many of these assumptions are beyond the control of Embarcadero
and Morgan Stanley. Any estimates contained in Morgan Stanley’s
analyses are not necessarily indicative of future or actual values,
which may be significantly more or less favorable than those suggested
by such estimates. Events occurring after April 5, 2007 may have
affected, or may in the future affect, Morgan Stanley’s
analyses and the assumptions used in preparing such analyses. Morgan
Stanley has not updated, revised or reaffirmed these analyses after
April 5, 2007, and has not assumed any obligation to so update, revise
or reaffirm.
Additional Information about the Proposed Transaction and Where you
Can Find It
On May 24, 2007, Embarcadero filed a definitive proxy statement with the
Securities and Exchange Commission (“SEC”)
in connection with the Merger. INVESTORS AND SECURITY HOLDERS ARE
STRONGLY ADVISED TO READ THE DEFINITIVE PROXY STATEMENT BECAUSE IT
CONTAINS IMPORTANT INFORMATION ABOUT THE MERGER. Investors and security
holders may obtain free copies of these documents and other documents
filed by Embarcadero with the SEC through the web site maintained by the
SEC at www.sec.gov.
In addition, investors and security holders may obtain free copies of
the proxy statement and other documents filed with the SEC by
Embarcadero by going to Embarcadero’s
corporate website at www.embarcadero.com
or by directing a request by mail or telephone to Embarcadero
Technologies, Inc., 100 California Street, 12th Floor, San Francisco, CA
94111, Attention: Corporate Secretary, Telephone: (415) 834-3131.
Embarcadero and certain of its directors, executive officers and other
members of management and employees may, under the rules of the SEC, be
deemed to be “participants”
in the solicitation of proxies from stockholders of Embarcadero in favor
of the Merger. A description of any interests that Embarcadero’s
officers and directors have in the Merger is available in the proxy
statement. Information regarding certain of these persons and their
beneficial ownership of Embarcadero’s common
stock is also set forth in the proxy statement.
About Embarcadero Technologies
Embarcadero Technologies, Inc. (Nasdaq: EMBT) delivers professional
grade database tools that companies use to design, develop and manage
databases and the data they contain. More than 12,000 customers
worldwide and over 90 of the Fortune 100 rely on Embarcadero’s
cross-platform tools to reduce complexity, improve productivity and
strengthen security. The Company’s flagship
database tools include: ER/Studio, DBArtisan, Rapid SQL and Change
Manager. Founded in 1993, Embarcadero Technologies is headquartered in
San Francisco with offices in Melbourne, Australia, Munich, Germany and
Maidenhead, United Kingdom. For more information, visit www.embarcadero.com.
Forward-Looking Statements
The statements in this press release that are not historical facts
are forward-looking statements that involve risks and uncertainties,
including risks identified in the Company’s
periodic filings with the Securities and Exchange Commission including,
but not limited to, those appearing under the caption “Risk
Factors” in the Company’s
most recent Quarterly Reports on Form 10-Q and Annual Report on Form
10-K. Actual results, events, and performance may differ materially.
Readers are cautioned not to place undue relevance on these
forward-looking statements, which speak only as of the date hereof.
Except as required by law, the Company does not intend to release
publicly the result of any revisions to these forward-looking statements
that may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of anticipated events.
Embarcadero, the Embarcadero Technologies logos and all other
Embarcadero Technologies product or service names are trademarks of
Embarcadero Technologies, Inc. All other trademarks are property of
their respective owners.