DULLES, Va., Sept. 30 /PRNewswire/ -- Eyak Technology, LLC (EyakTek) today announced that by letter dated September 27, 2010 it had increased the price in connection with its outstanding proposal to acquire all of the outstanding capital stock of GTSI Corp. to $7.50 per share in cash. A copy of that letter is included at the end of this press release.
By letter dated September 30, 2010, GTSI stated that it "was not interested in pursuing the transaction proposed in your September 27, 2010 letter..." In this latest action, GTSI has again refused to negotiate a proposal that offers GTSI stockholders exceptional value and an immediate realization event in an otherwise illiquid stock. Nevertheless, EyakTek remains firmly committed to pursuing a transaction with GTSI and continues to consider all options available to it to ensure that GTSI stockholders have the opportunity to receive the maximum value for their investment. EyakTek believes this latest rejection by GTSI, together with the business risks and financial costs associated with delaying a transaction, will erode the value of the transaction for GTSI stockholders.
EyakTek's increased price of $7.50 per share represented a premium of over 44.8% to GTSI's closing price on September 10, 2010, the last day of trading before EyakTek's initial proposal was made public, and a 44.2% premium to the volume weighted average price of GTSI's shares for the 30 trading days then ended.
EyakTek is an Alaska Native-owned small business that provides award-winning solutions in infrastructure and security systems, communications, information technology, and healthcare services. As a recognized leader in the industry, EyakTek has consistently been ranked as one of the Top 100 Federal Contractors.
Below is the full text of the letter sent by EyakTek to GTSI on September 27, 2010:
September 27, 2010 VIA EMAIL AND OVERNIGHT MAIL GTSI Corp. 2553 Dulles View Drive, Suite 100 Herndon, VA 20171-5219 Attn: John M. Toups Chairman of the Board Re Revised Proposal to Acquire GTSI Corp. Dear John:
We appreciate your making your financial advisor available to our financial advisor over the past week to discuss the proposal Eyak Technology, LLC has made to the board of directors of GTSI Corp. As you know, EyakTek has previously proposed to acquire GTSI at a price of $7.00 per share in cash. EyakTek remains fully committed to a transaction and enthusiastic about the value and liquidity it would offer to GTSI's stockholders. We believe that the best way to realize that value is for GTSI's board to engage in good faith negotiations and then to allow GTSI stockholders to consider the transaction. Additional delay--and its associated business risks and financial costs--will likely erode the value of a transaction for GTSI stockholders.
In the interest of bringing this matter to a prompt conclusion through a negotiated transaction, EyakTek is increasing its proposed acquisition price to $7.50 in cash. EyakTek's increased price of $7.50 per share represents a premium of over 44.8% to GTSI's closing price on September 10, 2010, the last day of trading before EyakTek's initial proposal was made public, and a 44.2% premium to the volume weighted average price of GTSI's shares for the 30 trading days then ended.
In the current difficult economic environment, we hope you and your board will continue to consider a realistic assessment of the risks associated with executing the new and untested strategy of transforming to a systems integrator (e.g., negative budgetary trends, the intense competition in the services market segment, insourcing risks and the relatively small size of GTSI's services platform) and the large investment of time and expense that will be required to carry out GTSI's transformation.
Your financial advisor indicated that GTSI would consider providing EyakTek with certain operational information relating to GTSI's new systems integrator strategy. Because EyakTek's current expectation is to reassess the strategic direction following the acquisition, our initial sense is that such operational information would not be helpful. However, we will of course consider in good faith any information GTSI may choose to share with EyakTek. In order to allow GTSI to share such information and give the two parties a period of time in which to have a constructive negotiation, EyakTek would be willing to enter into a short standstill agreement.
As stated above, we believe time is of the essence in this matter. We look forward to your prompt response and to hopefully negotiating an all cash transaction that will deliver immediate value to GTSI's stockholders. If we don't hear from you within 72 hours we will assume that you are not interested in engaging in further discussions at this time. Thank you in advance for your consideration of our revised proposal.
Sincerely, Keith Gordaoff Chairman of the Board and Chief Executive Officer CONTACT: Andrea Williams of Eyak Technology, LLC, +1-703-880-5308
Eyak Technology, LLC
CONTACT: Andrea Williams of Eyak Technology, LLC, +1-703-880-5308
Web Site: http://www.eyaktek.com/
