Redknee Solutions Inc. is looking at its options.
At the top of the week, the Mississauga, Ontario-based provider of real-time monetization and subscriber management software announced it had “formed a special committee of independent members of the board of directors of the Company to consider various strategic and financing alternatives potentially available to the Company to enhance shareholder value, including a possible sale of the Company.”
As part of the process, Redknee has engaged TD Securities Inc. as financial advisor, the company said in the statement, but that there is no certainty that any transaction or alternative will be undertaken or pursued. There’s also no definitive schedule to complete its evaluation and no decision on any particular transaction or alternative has been reached at this time.
In the statement, Redknee said it did not intend to “disclose ongoing developments with respect to this process, but in accordance with its continuous disclosure obligations, will disclose material developments if, as and when they occur.” When contacted by IT World Canada for comment, a spokesperson responded via email along those same lines, saying management is not conducting interviews.
Redknee’s disclosure that it was formally reviewing “strategic alternatives” comes 10 days after publicly acknowledging a letter received from Crescendo Partners on that was subsequently publicly disclosed by Crescendo Partners on August 11, 2016. In its letter, Crescendo Partners indicates that it is a significant shareholder of Redknee, and urges the company’s board of directors to commence a process for the sale of Redknee.
In that letter, Crescendo Partners Chairman and CEO Eric Rosenfeld said the firm has “lost confidence in the current Board and management team’s ability to create value for shareholders and believe that the Company should immediately commence a strategic process to sell itself.”
Crescendo sees “significant value in Redknee’s business,” but also recognizes that the company has consistently underperformed its peers and disappointed the financial markets, the letter said, noting that ESW Capital, LLC a private investment firm whose motto is to “acquire, transform and run” software companies, filed an early warning report August 10 disclosing ownership of approximately 11.55 per cent of the Redkee’s outstanding shares.
In a new release August 12, Redknee said it “is committed to building value for all shareholders, and to that end, will continue to execute its strategic plan and review alternatives available to it. Redknee is in the course of reviewing the letter from Crescendo Partners with its Board of Directors and advisers, and intends to invite Crescendo Partners to meet with Redknee representatives to obtain an understanding of its views.”
Founded in 1999, Redknee works with communications service providers to help them tap new revenue streams more quickly with real-time charging, policy and billing and customer care functionality that the company says can work with any mode of network access and payment type.
A day after revealing its intent to review its options going forward, Redknee announced a multi-million contract to upgrade a Tier 1 communication service provider in Europe, Middle East, and Africa to Redknee Unified 2016.