Consumer electronics maker Brillian Corp. and privately held Syntax Groups Corp. announced that they have entered into a definitive agreement to merge.
Pending stockholder and regulatory approval, Brillian will acquire all outstanding shares of Syntax in a tax-free, stock-for-stock transaction. As approved by the boards of directors of each company, the merger calls for each share of Syntax to be exchanged at an initial exchange rate of 1.6195 shares of Brillian.
The exchange rate will be adjusted at the closing for subsequently issued shares and convertible securities such that the shareholders of Syntax will own approximately 70 percent of the fully diluted shares of the combined company and the shareholders of Brillian will own approximately 30 percent of the combined company.
Brillian is a maker of Gen II liquid-crystal-on-silicon (LCoS(TM)) technology and 720p and 1080p Gen II LCoS(TM) HDTVs and components. Syntax manufactures the Olevia brand of widescreen HDTV-ready LCD TVs and reportedly holds 7 percent of the LCD market share in North America, according to market research firm Display Search.
The combined company, Syntax-Brillian, will adopt Syntax's fiscal year ended June 30, 2006. For the year ended June 30, 2005, Syntax had revenue of approximately U.S. $90 million.
Vincent F. Sollitto Jr., president and CEO of Brillian, will serve as chairman and CEO of Syntax-Brillian. James Li, Syntax's current CEO, will be the president and COO of Syntax-Brillian. Wayne Pratt, Brillian's CFO, will be the CFO of Syntax-Brillian. Thomas Chow, Syntax's CFO, will be the chief procurement officer of Syntax-Brillian. Robert Melcher, Brillian's chief technical officer, will be the chief technical officer of Syntax-Brillian. The board of directors of the combined company will include four members of Brillian and Syntax management. Five members will be independent directors pursuant to Nasdaq and SEC regulations for a total of nine members.
"We have a very clear and focused strategy to not only become a Tier One digital TV manufacturer, but also to play a leading role in the global HDTV market," said Mr. Li. "The merger with Brillian is mutually beneficial, complementary, and additive in virtually every sense. It will make for a stronger and strategically more competitive global company."
The transaction is expected to close in the fourth calendar quarter of 2005 and is subject to customary closing conditions, including approval by the shareholders of both companies and regulatory approvals.
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