Insider Brief
- Plurilock shareholders will vote Nov. 18 on a proposed acquisition by Quantum eMotion that would combine quantum-based security technologies with Plurilock’s cybersecurity operations and customer network.
- Shareholders would receive C$0.084 in cash and 0.0763 Quantum eMotion shares for each Plurilock share, implying an offer value of C$0.28 per share.
- Plurilock’s board recommends approval, with completion expected in late November subject to shareholder, court and other required approvals.
Plurilock Security shareholders will vote Nov. 18 on a proposed acquisition by Quantum eMotion, a deal intended to pair quantum-based security technology with an established cybersecurity business and its customer network.
Plurilock said in a news release that it has filed and mailed documents explaining the transaction ahead of a special shareholder meeting in Vancouver. The companies expect to complete the acquisition in late November if shareholders, the court and other authorities approve it.
The announcement marks another step toward completing the proposed purchase, rather than a completed acquisition.
Under the agreement, Quantum eMotion would acquire all outstanding Plurilock common shares. Shareholders would receive C$0.084 in cash and 0.0763 of a Quantum eMotion share for each Plurilock share they own.
For example, an investor holding 1,000 Plurilock shares would be entitled to C$84 in cash and 76.3 Quantum eMotion shares before any provisions governing fractional shares.
The companies put the implied value of the offer at C$0.28 per Plurilock share. Because the payment includes stock, its value will depend partly on Quantum eMotion’s share price. The agreement specifies how many Quantum eMotion shares investors would receive, rather than guaranteeing a fixed cash value for that portion.
A Route to Customers
The business rationale centers on bringing Quantum eMotion’s technology to more customers through Plurilock’s existing sales and service operations, according to the statement.
Quantum eMotion develops technologies for securing digital information, including cryptography and systems that generate randomness for security applications. Randomness helps make encryption keys difficult to predict.
Plurilock would contribute cybersecurity operations, customer relationships and established purchasing channels, including those used to sell to government organizations.
The companies see opportunities to offer Quantum eMotion’s technology to Plurilock customers, run pilot projects and combine it with Plurilock’s tools for protecting systems and verifying users’ identities.
They expect the combination to improve their ability to serve government, defense, critical infrastructure and regulated businesses. Those benefits remain expectations, however, rather than results demonstrated by the proposed transaction.
Board Backs the Deal
Plurilock’s board recommends that shareholders approve the acquisition. Directors eligible to participate in the decision voted unanimously in favor; some directors were required to abstain under applicable laws.
Among its reasons, the board cited an implied offer value approximately double Plurilock’s average trading price over the 20 trading days through Sept. 25, weighted by the number of shares traded each day.
The board also said shareholders would retain an interest in the combined business through their Quantum eMotion shares, giving them exposure to its future performance.
Another consideration was trading activity. The board said Quantum eMotion shares, listed on the TSX Venture Exchange and NYSE American, trade more actively than Plurilock shares, potentially making them easier for investors to buy and sell.
Directors, officers and certain other shareholders have signed agreements to support the acquisition. Those commitments represented approximately 13.1% of Plurilock’s outstanding shares as of Sept. 28.
Approvals Still Required
The acquisition needs support from at least two-thirds of the votes cast at the meeting, either in person or through a representative.
It must also receive a separate simple majority excluding shares held by three senior Plurilock executives and directors: Ian L. Paterson, Veera Singh and Ali Hakimzadeh. That requirement falls under rules intended to protect minority shareholders in certain transactions.
Completion also requires approval from the Supreme Court of British Columbia, along with regulatory, stock exchange and other customary approvals.
Shareholders eligible to vote are those who held shares at the close of business Oct. 1. The meeting is scheduled for 10 a.m. Pacific time Nov. 18 in Vancouver.