FINSIGHT has been a long-term shareholder for the majority of Q4's existence as a public company. We own over 2.2 million or approximately 5.6% of Q4's outstanding shares, which we believe represent approximately 8.5% of the minority (non-rolling) shareholders eligible to vote at the upcoming Special Meeting.
As a seasoned provider of capital markets financial technology, serving potentially hundreds of the same corporate issuers, broker dealers and institutional investors as Q4, FINSIGHT believes it has a credible understanding of the financial services industry and sees tremendous intrinsic value within Q4. FINSIGHT's perspective is that of a committed, long-term believer in and investor of Q4.
FINSIGHT believes that the acquisition of Q4, at an almost 50% discount to its 2021 IPO price, is a premature and opportunistic transfer of value from the minority (non-rolling) shareholders to insiders of Q4, which include
We are deeply concerned about the genesis, timing, and scope of the sale process, the level of involvement of conflicted members of the Board and management in the sale process, and the potential for change in control payments to be paid to members of management as a result of the sale. We believe that Q4's business and future prospects are strong, and that the proposed Arrangement significantly undervalues the current and future potential of the business.
To be clear, we are not advocating for an incremental increase in the purchase price. We believe the proposed Arrangement is significantly off-market and are concerned that the process undertaken resulting in this proposed Arrangement was potentially fraught with irreconcilable conflicts that Q4 has failed to address to date. More importantly, FINSIGHT believes Q4 is at an inflection point following a successful restructuring process and is thus well positioned to thrive as a standalone public company.
For these reasons, and as we explain further below, subject to more substantive disclosure, FINSIGHT intends to vote AGAINST the Arrangement.
FINSIGHT acquired its ownership in Q4 because we believe in its long-term growth potential and the strength of its core business.
Within the US investor relations space, Q4 is virtually unrivaled. The Company has over
Q4's operating profile today is significantly better than at the time of its
The reported acquisition multiple is approximately 2.8x annual recurring revenue ('ARR'), a demonstrably low multiple when compared with Q4's public comparables on a standalone basis, and even worse when considering we estimate Q4 has over
FINSIGHT, along with thousands of minority (non-rolling) investors who collectively own approximately 60% of outstanding shares, patiently supported the Company and its management team as it invested in innovation and growth while optimizing its expense profile. This support is evidenced by the prolonged periods of low average daily trading volume for Q4 stock in 2022 and 2023. The minority (non-rolling) shareholders are due the opportunity to participate in its future upside potential of the Company. Instead, the proposed Arrangement threatens to prematurely siphon the Company's future potential into the pockets of conflicted insiders, the Rolling Shareholders, and
Who spoke for minority shareholders in the boardroom
As Q4 revealed, the most significant, longest tenured, and most knowledgeable insiders, specifically
We are concerned that the participation of a majority of the Board and the CEO as Rolling Shareholders presents an irreconcilable conflict for the Board, and notwithstanding the formation of the Special Committee, may have strongly influenced the outcome of this process.
Absent evidence to the contrary, we also believe that the commitment of the Company's CEO and shareholder
We suspect the Company will maintain that following the announcement, it commenced a 'Go-Shop Period' which would provide a market check on the transaction. As a significant shareholder, we would like to understand the extent of the Company's outreach to potential strategic and financial acquirers during the process that led to the Sumeru transaction, and during the Go-Shop period. In Q4's
How many initial inbound inquiries did management, or the Board, receive
How many parties were contacted before and after the go-shop period and how many were strategic or financial acquirers
How many entered into NDAs with the Company
How many conducted due diligence
Who, if any, submitted a proposal to Q4
Who was involved in the discussions and negotiations with these entities
Will members of management of Q4 receive change in control payments, accelerated equity compensation vesting, or other similar benefits as a result of the Arrangement
Unless the Company can demonstrate to shareholders otherwise, we remain steadfast in our belief that the Special Committee process did not serve the interests of the minority (non-rolling) shareholders, who collectively own a majority of the Company.
A standalone Q4 is the best alternative for ALL Shareholders
FINSIGHT believes that Q4 has a bright future and should remain a public standalone company and allow its patient, loyal and long term shareholders, an opportunity to benefit from improving market conditions and the 18-month restructuring process that has been so successful. We believe that Q4's operating profile and long-term prospects are as strong as ever. We are not alone in our view. In fact, both CEO
Given the Company's short history since its IPO, we believe that the Arrangement is a premature and opportunistic effort by insiders of the Company to preserve their positions and capture future upside equity value of the Company for their own benefit (rolling shareholders) and Sumeru at the expense of minority (non-rolling) shareholders. In fact, CEO
Absent more fulsome disclosure evidencing the scope and objectivity of the sale process, FINSIGHT intends to vote AGAINST the proposed Arrangement and reserves all options available to it as a shareholder of Q4.
About
No Solicitation
This press release is for informational purposes only and is not a solicitation of proxies. If FINSIGHT determines to solicit proxies in respect of any meeting of shareholders of the Company any such solicitation will be undertaken by way of an information circular or as otherwise permitted by applicable Canadian corporate and securities laws
Disclaimer for Forward-Looking Information
Certain information in this news release may constitute 'forward-looking information' within the meaning of applicable securities legislation. Forward-looking statements and information generally can be identified by the use of forward-looking terminology such as 'outlook,' 'objective,' 'may,' 'will,' 'expect,' 'intend,' 'estimate,' 'anticipate,' 'believe,' 'should,' 'plans,' 'continue,' or similar expressions suggesting future outcomes or events. Forward-looking information in this news release may include, but is not limited to, statements of FINSIGHT regarding how FINSIGHT intends to exercise its legal rights as a shareholder of the Company.
Although FINSIGHT believes that the expectations reflected in any such forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. Such forward-looking statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. Except as required by law, FINSIGHT does not intend to update these forward-looking statements.
Company disclosures to shareholders and securities filings.
https://www.theglobeandmail.com/business/technology/article-more-tech-companies-disappearing-from-tsx-as-q4-agrees-to-257-million/
Contact:
Tel: (416) 305-1459
Email: FINSIGHT@gagnierfc.com
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