SALT LAKE CITY, UT -- (Marketwired) -- 12/18/15 -- Sorenson Holdings, LLC ("HoldCo") announced today that it is commencing a cash tender offer for up to $50 million principal amount of its and Sorenson Finance Corp.'s outstanding 13.0% Senior Unsecured PIK Toggle Notes due 2021 (the "HoldCo Notes") at a price of $1,000 per $1,000 principal amount plus accrued and unpaid interest. If the aggregate principal amount of HoldCo Notes validly tendered (and not validly withdrawn) exceeds $50 million, HoldCo will prorate the amount of Notes that it will accept for purchase based on the total amount tendered. The tender offer is subject to the terms and conditions of an Offer to Purchase, dated as of December 18, 2015 (as may be amended or supplemented from time to time, the "Offer to Purchase") and the accompanying letter of transmittal.
Concurrently with the tender offer, HoldCo's wholly owned subsidiary, Sorenson Communications, Inc. ("OpCo," or together with HoldCo, "Sorenson"), is soliciting consents from holders of at least a majority of the outstanding principal amount ("Requisite Consents") of its 9.0% Senior Secured Second Lien PIK Toggle Notes due 2020 (the "OpCo Notes") to certain proposed amendments to the indenture governing the OpCo Notes (the "Proposed Amendments"). The consent solicitation is subject to the terms and conditions of a Consent Solicitation Statement, dated as of December 18, 2015 (as may be amended or supplemented from time to time, the "Consent Solicitation Statement") and the accompanying consent letter.
The Proposed Amendments would, among other things, amend the limitation on restricted payments covenant in the indenture governing the OpCo Notes to allow additional dividend or distribution payments or loans by OpCo to holders of its equity interests from time to time in an aggregate amount not to exceed $100.0 million (the "Additional Distributions"). OpCo also announced today that it has entered into an amendment to its First Lien Credit and Guaranty Agreement to allow the Additional Distributions (the "Credit Agreement Amendment"). Sorenson expects the Credit Agreement Amendment to become effective upon the effectiveness of the Proposed Amendments. HoldCo intends to finance the tender offer with the proceeds of an intercompany distribution or intercompany loan from OpCo that would be permitted as part of the Additional Distributions if the Proposed Amendments and the Credit Agreement Amendment become effective.
On the terms and subject to the conditions set forth in the Offer to Purchase, HoldCo will pay for HoldCo Notes validly tendered (and not validly withdrawn) and accepted for purchase promptly following the expiration of the tender offer. Subject to the terms and conditions in the Consent Solicitation Statement, if OpCo receives the Requisite Consents and the Proposed Amendments are implemented, OpCo will promptly upon expiration of the consent solicitation pay a consent fee equal to $1 per $1,000 principal amount of OpCo Notes for which consents are validly delivered (and not validly revoked).
Sorenson has been advised by certain holders of OpCo Notes and HoldCo Notes that such holders intend to deliver consents with respect to more than a majority of the aggregate principal amount of the OpCo Notes in the consent solicitation and that certain of such holders intend to tender all of their HoldCo Notes in the tender offer, and such tenders would represent a substantial majority of the outstanding aggregate principal amount of the HoldCo Notes.
HoldCo's consummation of the tender offer is subject to the satisfaction or waiver of certain conditions, including, among other things, OpCo's receipt of the Requisite Consents, the payment of the consent fee, the effectiveness of the Proposed Amendments and the Credit Agreement Amendment and the receipt by HoldCo of an intercompany distribution or intercompany loan from OpCo. OpCo's consummation of the consent solicitation and payment of the consent fee are also subject to the satisfaction or waiver of certain conditions, including, among other things, OpCo's receipt of the Requisite Consents and the effectiveness of the Proposed Amendments and the OpCo Credit Agreement Amendment. HoldCo's tender offer is conditioned upon the consummation of OpCo's consent solicitation, but OpCo's consent solicitation is not conditioned on the consummation of HoldCo's tender offer. Full details of the terms and conditions of the tender offer and the consent solicitation are included in the Offer to Purchase and the Consent Solicitation Statement, respectively.
The tender offer by HoldCo and the consent solicitation by OpCo will each expire at 9:00 a.m., New York City time, on January 20, 2016, unless extended or earlier terminated. Subject to applicable law, Sorenson reserves the right to extend, terminate or amend the tender offer or the consent solicitation in its sole discretion.
Neither Sorenson nor any other person makes any recommendation as to whether holders should tender HoldCo Notes or deliver consents for OpCo Notes, and no one has been authorized to make such a recommendation. Holders must make their own decisions as to whether to tender HoldCo Notes or deliver consents for OpCo Notes.
Any inquiries regarding the tender offer or the consent solicitation may be directed to D.F. King & Co., Inc., the Information Agent and Tender Agent for the tender offer and the Information, Tabulation and Paying Agent for the consent solicitation, at (212) 269-5550 (collect) or (800) 581-3783 (toll free).
This announcement shall not constitute an offer to purchase, a solicitation of an offer to sell or a solicitation of consents for the HoldCo Notes, the OpCo Notes or any other securities. The tender offer is being made only through and subject to the terms and conditions set forth in the Offer to Purchase and accompanying letter of transmittal and the consent solicitation is being made only through and subject to the terms and conditions set forth in the Consent Solicitation Statement and accompanying consent letter. Holders of the HoldCo Notes and the OpCo Notes should carefully read these documents before making any decision with respect to the tender offer or the consent solicitation. The tender offer and consent solicitation are not being made to holders in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.
About Sorenson Communications
Sorenson Communications® (www.sorenson.com) is a provider of industry-leading communications products and services for the deaf and hard-of-hearing. The company's offerings include Sorenson Video Relay Service® (SVRS®), the highest-quality video interpreting service; the Sorenson ntouch® VP videophone, designed especially for use by deaf individuals; ntouch® PC, software that connects users to SVRS by using a PC and webcam; ntouch® for Mac®, software that connects users to SVRS by using an Apple® computer; ntouch® Tablet, which turns the Apple iPad® with a front-facing camera into a larger-screen mobile VP; and ntouch® Mobile, an application empowering SVRS communication via mobile devices.
If you choose Sorenson as your default provider, you can port your existing 10-digit number to Sorenson from another provider or Sorenson can provide you with one for the geographic area where you live or work. If you later change your default provider, you can port your number to that provider. When selecting Sorenson, you must provide to Sorenson the physical address (i.e., the Registered Location) from which you are placing the call, so that Sorenson can properly route any 911 calls you may make. If you move or change your location, you must notify Sorenson immediately. You can update your Registered Location from your Sorenson videophone by calling 800-659-4810 or by visiting www.svrs.com/moving. Sorenson will confirm receipt of your Registered Location information. Emergency calls made via internet-based TRS may not function the same as traditional E911 service. For example, you may not be able to dial 911 if there is an internet-service failure or if you lose electrical power, and your 911 call may not be routed correctly if you have not updated your Registered Location. For more information on the process of obtaining 10-digit numbers and the limitations and risks associated with using Sorenson's VRS to place a 911 call, please visit Sorenson's website: www.sorenson.com/disclaimer. For information on toll-free numbering, please visit www.svrs.com/tollfree.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
The statements included in this news release, and other statements that are not historical facts, may contain forward-looking statements. In addition to the assumptions specifically mentioned in the above paragraphs, there are a number of other factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, Sorenson's ability to consummate the tender offer and consent solicitation on the terms described in this news release or at all, Sorenson's substantial debt and lease obligations, Video Relay Service and IP Captioned Telephone Service rates, future regulatory actions by the Federal Communications Commission, pending patent litigation and other factors detailed in risk factors, solicitation considerations and elsewhere in the Offer to Purchase and the Consent Solicitation Statement. Should one or more of these risks or uncertainties materialize or the consequences of such a development worsen, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. Sorenson disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.