The Management Board of Summa Linguae S.A. based in Krakow (“Issuer”) hereby announces that it has launched negotiations regarding the terms and conditions of acquiring by the Issuer 100% of shares (“Transaction”) in a technology company operating in the language services industry, based in Canada and active mainly in the USA and Canadian markets (“Target”), and that it signed, on 24 May 2019, heads of terms with the Target and its shareholders (“Heads of Terms”). The Heads of Terms defines the rules of conducting negotiations and key terms and conditions of the Transaction. The key arrangements contained in the Heads of Terms are as follows:
(1) The maximum price for 100% of shares in the Company shall be USD 8,000,000.00 (PLN 30,960,000.00 in accordance with the average exchange rate announced by the National Bank of Poland as at 23 May 2019).
(2) The ultimate structure of the Transaction will be finally determined after the Issuer and its advisors have completed a due diligence audit, which the Issuer intends to conduct within 3 months of signing the Heads of Terms.
(3) The Issuer has been granted exclusive rights to carry out negotiations regarding the Transaction for 6 months of signing the Heads of Terms.
(4) The Heads of Terms contains provisions regarding liquidated damages. The Issuer will be entitled to demand payment of liquidated damages in the amount of USD 250,000.00 (PLN 967,500.00 in accordance with the average exchange rate announced by the National Bank of Poland as at 23 May 2019) in case of violation of its exclusive rights to negotiations by the Target or its shareholders, as well as in case of non-acceptance by the Target’s shareholders of the Issuer’s binding offer to acquire the Target’s shares on the terms and conditions defined in the Heads of Terms. Should the Issuer resign from concluding the Transaction for reasons other than those specified in the Heads of Terms, the Target will have the right to claim liquidated damages from the Issuer in the amount of USD 250,000.00 (PLN 967,500.00 in accordance with the average exchange rate announced by the National Bank of Poland as at 23 May 2019).
(5) The Heads of Terms is not a legally binding agreement, subject to the confidentiality clauses and those relating to the exclusive rights to negotiations and liquidated damages.
The Target is a technology company operating mainly in the US and Canadian markets. The Target has a subsidiary company in the USA. The Target uses its proprietary technology and specializes in developing solutions for data annotation, collecting and processing multilingual data available in many different forms (voice, image, text), used mainly for training purposes and to work out algorithms enabling AI development. The Target also provides content localization and translation services. The Target is a leading provider of such solutions for the largest IT and high-tech companies.
The Target’s preliminary, non-audited, estimated revenue for 2018 was approximately USD 5,000,000.00 (PLN 19,350,000.00 in accordance with the average exchange rate announced by the National Bank of Poland as at 23 May 2019).
The Target’s acquisition is part of the Issuer’s strategy of building a global brand that provides technological solutions to manage and process multilingual content, ranked among the top global players in the industry.
The Issuer considers the above information material because if the Transaction is completed, the price of the Target’s shares will exceed the materiality criterion set out in the Disclosure Policy published in Current Report 39/2018 of 27 November 2018.
Legal grounds: Article 17(1) of MAR – confidential information.
The Company’s representatives,
Krzysztof Zdanowski, President of the Management Board