Warburg Pincus Agrees to Purchase $75 Million in ScanSoft Common Stock
Monday May 9, 4:14 pm ET
Investment in Support of the ScanSoft-Nuance Merger
PEABODY, Mass.--(BUSINESS WIRE)--May 9, 2005--ScanSoft, Inc. (Nasdaq: SSFT - News), a leading provider of speech and imaging solutions, today announced that Warburg Pincus, the global private equity firm, has agreed to purchase $75 million of ScanSoft common stock, the proceeds of which will be used in conjunction with the merger between ScanSoft and Nuance Communications, Inc. (Nasdaq: NUAN - News) and other corporate purposes.
Warburg Pincus, a leading investor in technology companies, has agreed to purchase ScanSoft common stock in separate transactions as follows:
* 3.54 million shares at a purchase price of $4.24 per share, the closing bid price on Thursday, May 5, 2005, for an aggregate investment of $15.0 million. This transaction closed today and is independent of the Nuance transaction.
* 14.2 million shares at a purchase price of $4.24 per share, for an aggregate investment of $60.0 million. This transaction will close concurrent with, and is contingent upon, the closing of the Nuance transaction and shareholder approval.
* In addition, Warburg Pincus has acquired a warrant to purchase 0.86 million shares of ScanSoft common stock along with the first investment, and will acquire a warrant to purchase 3.18 million shares of ScanSoft common stock upon the closing of the second investment. Both warrants have an exercise price of $5.00 per share and a four-year term.
William H. Janeway, a Vice Chairman of Warburg Pincus and a ScanSoft Director, stated: "The merger of ScanSoft and Nuance creates a company that combines deep technical capabilities with a broad range of customer specific expertise. We are confident that the merged company, as a comprehensive provider of speech solutions, will have the resources and experience to extend ScanSoft's strong operational performance."
As of March 31, 2005, Warburg Pincus held 12.3 million shares of ScanSoft common stock, 3.6 million shares of preferred stock and warrants to acquire 3.0 million shares of ScanSoft common stock.
ScanSoft and Nuance today announced a definitive agreement for ScanSoft to acquire all of the outstanding common stock of Nuance. The transaction is valued at $221 million based on the closing price of ScanSoft common stock of $4.46 per share as of May 6, 2005, or $122 million net of Nuance's cash and equivalents of $98.7 million as of March 31, 2005, which includes $11.1 million of restricted cash. See today's related release titled, ScanSoft and Nuance to Merge, Creating Comprehensive Portfolio of Enterprise Speech Solutions and Expertise.
In addition to the two transactions above, Warburg Pincus provided a commitment to purchase an additional $25.0 million of ScanSoft common stock, plus warrants, if requested by ScanSoft. The commitment is in connection with ScanSoft's potential future acquisition activities, and would be priced based on ScanSoft's closing share price the day preceding the signing of a definitive agreement.
About Warburg Pincus
Warburg Pincus has been a leading private equity investor since 1971. The firm currently has approximately $13 billion under management in a range of sectors including information and communication technology, business services, energy, financial services, healthcare and life sciences, media and real estate. The firm has invested approximately $4.8 billion in 140 technology companies, including Avaya (NYSE: AV - News), BEA Systems (Nasdaq: BEAS - News), and VERITAS Software (Nasdaq: VRTS - News). Warburg Pincus is an experienced partner to entrepreneurs seeking to create and build durable companies with sustainable value. The firm has offices in North America, Europe and Asia and an active portfolio of more than 100 companies. For more information, please visit www.warburgpincus.com |
