Unassociated Document
Filed
by Cambium-Voyager Holdings, Inc.
Pursuant
to Rule 425 under the Securities Act of 1933, as amended,
and
deemed filed pursuant to Rule 14a-12 under
the
Securities Act of 1934, as amended
Subject
Company: Voyager Learning Company
Commission
File No.: 001-07680
NEWS
RELEASE
Voyager
Learning Company to Combine with Cambium Learning to
Create
a Leading Provider of Educational Intervention Services
DALLAS and NATICK, Mass. – June 22, 2009 – Voyager
Learning Company (Pink Sheets: VLCY.PK), a publisher of education
materials and provider of education solutions for the K-12 market, today
announced the signing of a definitive merger agreement to combine its business
with Cambium Learning, Inc., an education company serving the needs of at-risk
and special student populations in the Pre-K through grade 12
market. In 2008, Cambium Learning had revenues of approximately $100
million and Voyager Learning Company reported $98.5 million in
revenues. The combination of the companies’ businesses will create a
leading provider of education intervention services in the United
States.
The
business combination will be effected through a newly-formed company,
Cambium-Voyager Holdings, Inc., which will acquire both companies and issue
shares in the combined company to stockholders of each of Voyager Learning
Company and Cambium Learning. Cambium-Voyager Holdings will be
majority owned by VSS-Cambium Holdings III, LLC, which will be majority owned by
Veronis Suhler Stevenson, a leading private equity investor in the information,
education and media industries and current owner of Cambium
Learning. Upon completion of the mergers, Cambium-Voyager Holdings
will be a public company, and anticipates having its common stock approved for
listing on the NASDAQ Global Market.
Under the
terms of the merger agreement, each Voyager Learning Company stockholder will be
entitled to receive, in exchange for each share of Voyager Learning Company
common stock owned by such stockholder, the following consideration: (i) at the
election of the stockholder, either one share of common stock of Cambium-Voyager
Holdings or $6.50 in cash, subject to a potential pro-rata reduction as
described below; and (ii) a pro-rata amount of certain tax refunds received by
Voyager Learning Company prior to the closing of the transaction; and (iii) a
contingent value right payable periodically during the period commencing nine
months after closing and expected to end on or about October 15,
2013. Neither the amount of the tax refund distribution nor the
maximum value of the contingent value right can be determined at this
time. However, the total per-share amount payable in respect of both
of these two forms of consideration on a combined basis is not expected to
exceed $0.89 per share of Voyager Learning Company common stock and may be
substantially less than that amount, depending on certain factors specified in
the merger agreement.
In the
aggregate, the Voyager Learning Company stockholders will receive consideration
of approximately $194 million (excluding contingent value rights and
distributions of certain tax refunds received prior to closing), based on the
agreed price of $6.50 per share used by the parties to determine the relative
contribution of the two companies. The sole stockholder of Cambium
Learning will receive aggregate consideration of approximately $158 million
(excluding the warrants described below), consisting of 20,454,312 shares of
Cambium-Voyager Holdings common stock issued in the merger at the ascribed value
of $6.50 per share. In addition, the stockholder of Cambium Learning
will receive a warrant to purchase additional shares of Cambium-Voyager Holdings
common stock based on the amount of Cambium Learning debt retired prior to
closing and certain other agreed upon matters. In connection with the
transaction, the combined company will assume approximately $168 million of
indebtedness of Cambium Learning, for total consideration under the merger
agreement of approximately $520 million.
The
amount of cash available to satisfy cash elections by Voyager Learning Company
stockholders will be determined by an agreed formula that is dependent on, among
other things, the cash generated by Voyager Learning Company prior to closing,
but the amount of cash available for cash elections is limited to a maximum of
$67,500,000 in the aggregate. If the amount of cash available for the
cash elections is insufficient to accommodate all of the aggregate cash
elections made by the Voyager Learning Company stockholders, then the
stockholders electing to exchange shares for cash will be subject to a pro-rata
reduction in accordance with certain agreed procedures set forth in the merger
agreement. The shares of Voyager Learning Company common stock that
are not exchanged for cash will be exchanged for shares of Cambium-Voyager
Holdings common stock.
The
transaction brings together two companies that operate in adjacent markets and
have a shared focus on helping struggling students succeed. Through
its business units, Voyager Expanded Learning, ExploreLearning and Learning A-Z,
Dallas-based Voyager Learning Company provides in-school core reading programs,
reading and math intervention programs, reading, science and math technology
platforms and professional development programs for school districts throughout
the United States. Cambium Learning, headquartered in Natick,
Massachusetts, provides research-based, culturally responsive and proven
instructional materials, services and technology to help educators raise the
achievement level of Pre-K through grade 12 students underserved by existing
instructional materials. Cambium Learning’s companies and brands
include Sopris West Educational Services, Kurzweil Educational Systems, and
IntelliTools. As of December 2008, Cambium Learning had a staff of
275, and Voyager Learning Company had 375 employees.
“As one
company, we will be a leading education intervention provider solely focused on
changing the learning trajectory for more than 20 million struggling students in
our country and helping them reach their learning potential,” said Ron Klausner,
President of Voyager Learning Company, who will be named Chief Executive Officer
of the combined company upon closing of the transaction. “We look
forward to continuing to offer proven effective, research-based products and
improving our capabilities by integrating components such as technology and
support across product lines.”
“We’ve
long respected the work of Voyager and the position Voyager maintains in the
market – serving the same student populations as Cambium. Combining
these two companies, which largely operate in adjacent market segments with
complementary products, brings together market-leading intervention programs and
services, a strong research base, and some of the best authors and researchers
in the industry,” said Dave Cappellucci, Chief Executive Officer of Cambium
Learning, who will become President of the combined company upon
closing. “Together, we will be able extend our reach and help many
more struggling students.”
“These
two companies have a terrific collection of brands, and each meets the profound
needs of the most challenged learners in the U.S. The timing is ideal
to combine forces to offer products and services that address the critical needs
of an estimated $4.5 billion annual market,” added Scott Troeller, Partner at
Veronis Suhler Stevenson. “The recently enacted American Recovery and
Reinvestment Act addresses many of the critical educational challenges we face –
and provides considerable new funding precisely targeting the students served by
the combined company.”
The board
of directors of Cambium-Voyager Holdings will consist of a total of nine
directors, five designated by Cambium Learning, and four designated by Voyager
Learning Company, including Richard Surratt, who will cease to be President and
Chief Executive Officer of Voyager Learning Company upon closing, but will serve
as a director of the combined company. George Logue, co-founder and
Executive Vice President of Cambium Learning, will continue his service as
Executive Vice President of the combined company. Cambium-Voyager
Holdings will be headquartered in Dallas.
The
transaction is expected to be completed in October 2009, and is subject to
approval by the stockholders of Voyager Learning Company, customary regulatory
approvals, including expiration or termination of any applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and other
closing conditions.
Aggregate
Cash and Stock Election Consideration to be Received by Voyager Learning Company
Stockholders
The
following table shows the amount of cash and stock consideration that would be
received by Voyager Learning Company stockholders, in the aggregate, if the cash
available for cash elections is as set forth at various assumed levels in the
table. The table also shows the hypothetical percentage ownership in
Cambium-Voyager Holdings which would be held by the Voyager Learning Company
stockholders at the specified assumed levels of cash available for cash
elections. The table does not include the amount of cash to be paid
to Voyager Learning Company stockholders from certain tax refunds received prior
to closing and from the contingent value rights described above. The
amounts provided are based on 29,874,145 Voyager Learning Company shares of
common stock outstanding on June 19, 2009, and 24,300,466 shares of
Cambium-Voyager Holdings to be held by the sole stockholder of Cambium Learning
upon completion of the mergers, 3,846,154 of which shares will be purchased by
the Cambium Learning stockholder immediately prior to the effective time of the
mergers at a price of $6.50 per share, for an aggregate of $25.0
million. These amounts also assume that each stockholder elects to
receive cash for each share of Voyager Learning Company common stock held by the
stockholder.
|
Amount
of Cash
Available
for Cash Election
|
|
Shares
of Cambium-Voyager Holdings Common Stock to be issued to
Voyager Learning Company Stockholders
|
|
Percentage
of Cambium-Voyager Holdings Common Stock to be
Owned
by
Voyager Learning Company Stockholders
|
|
$67,500,000
|
|
19,489,530
|
|
44.5%
|
|
$65,000,000
|
|
19,874,145
|
|
45.0%
|
|
$62,500,000
|
|
20,258,761
|
|
45.5%
|
Example
of Cash and Stock Election Consideration to be Received by a Stockholder Owning
1,000 Shares of Common Stock of Voyager Learning Company
The
following table shows the amount of cash and stock consideration that would be
received by a Voyager Learning Company stockholder owning 1,000 shares of common
stock of Voyager Learning Company if the cash available for cash elections is as
set forth at the various assumed levels in the table. The table does
not include the amount of cash to be paid to Voyager Learning Company
stockholders from certain tax refunds received prior to closing and from the
contingent value rights described above. The amounts shown are based
on 29,874,145 Voyager Learning Company shares of common stock outstanding as of
June 19, 2009. These amounts also assume that all stockholders elect
to receive cash for each share of Voyager Learning Company common stock held by
the stockholder.
|
Amount
of Cash
Available
for Cash Election
|
|
Cash
Consideration
|
|
Shares
of
Cambium
- Voyager Holdings Common Stock
|
|
$67,500,000
|
|
$2,255
|
|
653
|
|
$65,000,000
|
|
$2,171
|
|
666
|
|
$
62,500,000
|
|
$2,086
|
|
679
|
Proceeds
of Certain Tax Refunds and Contingent Value Rights
In
addition to the cash and stock consideration described above, each Voyager
Learning Company stockholder will receive a pro-rata portion of certain tax
refunds received by Voyager Learning Company prior to closing, a portion of
which will be payable at closing. Each Voyager Learning Company
stockholder also will receive additional cash consideration through a contingent
value right payable periodically during the period commencing nine months after
closing of the transaction and expected to end on or about October 15,
2013. The maximum amount of tax refunds payable will be determined at
closing and will depend on both the amount of specified tax refunds received
prior to closing and the amount of specified refunds received within 18 months
after closing, subject to reduction for certain agreed contingencies and
transaction-related expense reimbursements. Voyager Learning Company
is currently unable to estimate either the amount of tax refunds that will be
distributed immediately after closing or the amounts which might ultimately be
payable under the contingent value rights. However, the aggregate
amount payable on a per-share basis by way of tax refunds and contingent value
rights is not expected to exceed $0.89 per share of common stock of Voyager
Learning Company, and may be substantially less than that amount, depending on
certain factors specified in the merger agreement.
Cambium-Voyager
Holdings is represented by Lowenstein Sandler PC in connection with this
transaction, and Voyager Learning Company is represented by Perkins Coie
LLP. Allen & Company LLC serves as financial advisor to Voyager
Learning Company.
Voyager
Learning Company will hold a conference call at 4:00 p.m. Eastern Time on
Tuesday, June 23, 2009, to discuss the details of the transaction. To
listen to this conference call, please dial (888) 688-0384 and enter ID
#15899624 at 4:00 p.m. Eastern Time on June 23, 2009. The call will
be recorded and archived until July 21, 2009, and can be replayed by calling
(800) 642-1687 and entering ID #15899624. The conference call will
also be webcast and archived on the Voyager Learning Company website at www.voyagercompany.com.
About
Voyager Learning Company
Voyager
Learning Company (Pink Sheets: VLCY.PK) is based in Dallas, Texas,
and is a publisher of education materials and provider of education solutions
serving the K-12 market. Through its product lines, which include
Voyager Expanded Learning, ExploreLearning and Learning A-Z, Voyager Learning
Company is a leading provider of K-12 curriculum products, in-school core
reading programs, reading and math intervention programs, and professional
development programs for school districts throughout the United
States.
About
Cambium Learning
Cambium
Learning, which has established itself over 26 years as a nationally recognized
leader in education, is an education company that provides research-based,
culturally responsive and proven instructional materials, services and
technology to help educators raise the achievement level of those pre-K through
grade 12 students underserved by existing instructional
materials. Founded in 2002 and based in Natick, Massachusetts,
Cambium Learning believes that all students, including minority, at-risk,
economically disadvantaged and special student populations can achieve at a high
level. Cambium Learning companies and brands include Sopris West
Educational Services, Kurzweil Educational Systems, and
IntelliTools.
About
Veronis Suhler Stevenson
Veronis
Suhler Stevenson (www.vss.com) is a private equity and mezzanine capital fund
management company dedicated to investing in the information, education and
media industries in North America and Europe. VSS provides capital for buyouts,
recapitalizations, growth financings and strategic acquisitions to companies and
management teams with a goal to build companies both organically and through a
focused add-on acquisition program. To date, VSS equity and mezzanine
funds have invested in 63 platform companies, which have in turn completed over
270 add-on acquisitions resulting in a portfolio with realized and unrealized
enterprise values totaling over $14 billion.
Contact:
Voyager Learning
Company
Shannan
Overbeck
(214)
932-9476
soverbeck@voyagerlearning.com
Veronis Suhler
Stevenson
Jim
Rutherfurd
(212)
381-8446
rutherfurdj@vss.com
Cambium
Learning
Laurie
Burke
(508)
647-1340 ext. 104
lburke@cambiumlearning.com
Forward-Looking
Statements
Some
of the statements contained herein constitute forward-looking
statements. These statements relate to future events including the
transaction and the future financial performance of Voyager Learning Company,
Cambium Learning and the combined company, and involve known and unknown risks,
uncertainties and other factors that may cause the respective markets, actual
results, levels of activity, performance or achievements of Voyager Learning
Company, Cambium Learning or the combined company to be materially different
from any future results, levels of activity, performance or achievements. These
risks and other factors you should consider include, but are not limited to, the
ability to obtain regulatory approvals necessary to complete the transaction,
satisfaction of closing conditions in the merger agreement, approval of the
merger agreement by the stockholders of Voyager Learning Company, loss of key
personnel, success of ongoing product development, maintaining acceptable
margins, the ability to control costs, changes in customer demands or industry
standards, the ability to successfully attract and retain a broad customer base
for current and future products, K-12 enrollment and demographic trends, the
level of educational and education technology funding, the impact of federal,
state and local regulatory requirements on the business of the companies, the
impact on Voyager Learning Company’s stock price and trading volume as a result
of its common stock being traded over-the-counter, the impact of competition and
the risk that competitors will seek to capitalize on the risks and uncertainties
confronting the companies, including those listed above and the uncertainty of
economic conditions in general, financial market performance, and other risks
listed under "Risk Factors" in Voyager Learning Company’s filings with the
Securities and Exchange Commission. In some cases, you can identify
forward- looking statements by terminology such as "may," "should," "expects,"
"plans," "anticipates," "believes," "estimates," "predicts," "potential,"
"continue," "projects," "intends," "prospects," "priorities," or the negative of
such terms, or other comparable terminology. These statements are
only predictions. Actual events or results may differ
materially. Neither Voyager Learning Company, Cambium Learning nor
the combined company undertakes any obligation to update any of these
statements.
Additional
Information
In
connection with the proposed mergers, Cambium-Voyager Holdings will file with
the SEC a Registration Statement on Form S-4 that will include a proxy statement
of Voyager Learning Company that also constitutes a prospectus of
Cambium-Voyager Holdings. Voyager Learning Company will mail the
proxy statement/prospectus to each of its
stockholders. Cambium-Voyager Holdings and Voyager Learning Company
urge investors and security holders to read the proxy statement/prospectus
regarding the proposed mergers when it becomes available because it will contain
important information. You may obtain copies of all documents filed
with the SEC regarding this transaction, free of charge, at the SEC's website
(www.sec.gov). You
may also obtain these documents, free of charge, from Voyager Learning Company's
website (www.voyagercompany.com)
under the heading "Investor Relations" and then under the tab "SEC
Filings."
Cambium-Voyager
Holdings, Voyager Learning Company, Cambium Learning and their respective
directors, executive officers and various other members of management and
employees may be soliciting proxies from Voyager Learning Company stockholders
in favor of the merger agreement. Information regarding the persons
who may, under the rules of the SEC, be deemed participants in the solicitation
of Voyager Learning Company stockholders in connection with the proposed mergers
will be set forth in the proxy statement/prospectus when it is filed with the
SEC. You can find information about Voyager Learning Company's
executive officers and directors in its Annual Report on Form 10-K for the year
ended December 31, 2008 filed with the SEC on March 6, 2009. You can
obtain free copies of this document from Voyager Learning Company using the
contact information above. Additional information regarding the
interests of these potential participants will be included in the proxy
statement/prospectus and the other relevant documents filed with the SEC when
they become available. Cambium Learning is a private company and its
financial information is not publicly available, but will be included in the
Registration Statement filed on Form S-4.
This
communication shall not constitute an offer to sell or the solicitation of an
offer to buy any securities, nor shall there be any sale of securities in any
jurisdiction in which the offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of the
jurisdiction. No offering of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the Securities Act of
1933, as amended.
The
per-share value ascribed in the transaction as discussed herein is a measure of
the parties’ determination of their relative valuation to each other, and is not
a statement or opinion as to the market value of the combined
company. No such valuation has been performed by the
parties.
###