Battle to Buy Printcafe Heating Up
By Staff -- graphic arts online, 3/1/2003
As GAM goes to press, the battle for Pittsburgh-based Printcafe Software Inc. has heated up, with both Creo Inc., based in Burnaby, British Columbia, Canada, and Electronics for Imaging (EFI), Foster City, Calif., contending for the company.
As reported last month, Printcafe appointed a special committee to explore its strategic alternatives, including two acquisition offers. Creo, which now has a 55% stake in the company, asked Printcafe's board to consider an offer of $1.30 per share for all available outstanding shares. EFI soon followed with an unsolicited offer of $2.60 per share for all issued and outstanding stock in the company.
Printcafe announced on February 13 that it had entered into three agreements with EFI. First, a letter of agreement placed certain restrictions on Printcafe's ability to solicit other purchase offers, though the company said it still could respond to bona fide written offers with terms superior to EFI's. Second, a stock option agreement was created, giving EFI an option to purchase up to 2,126,574 shares of Printcafe common stock at a purchase price equal to $2.60 per share. The third agreement, a standby credit facility, obligated EFI to provide Printcafe with $11 million, along with working capital of up to $3 million, should certain Printcafe obligations become due.
A few days later, Creo announced that it would commence litigation in the Delaware Chancery Court to overturn what it called the "unusual and draconian defensive tactics" of Printcafe in response to Creo's purchase bid. On February 21, however, Printcafe announced that the court had denied Creo's requests.
Later that day, Creo upped the ante by issuing a formal offer to Printcafe's special committee to acquire all of the company's outstanding shares for $3.00 per share. In a letter outlining the offer, Creo argues that Printcafe's stockholders "would receive a substantial premium to the consideration being offered by EFI." Since its offer is superior to EFI's by 15%, Creo argues, Printcafe now may consider it under the terms of its earlier letter of agreement with EFI.
As of press time, neither EFI nor Printcafe had reported any response to Creo's move, nor were there any other purchase offers made by other potential suitors.
