Patent risk management company RPX Corporation said it entered into a definitive agreement to be acquired by HGGC, a middle market private equity firm, in an all-cash transaction valued at approximately $555 million.
HGGC will initiate a tender offer for RPX shares at a price of $10.50 per share in cash.
As of March 31, 2018, RPX had invested more than $2.4 billion to acquire more than 26,000 US and international patent assets and rights on behalf of 320 clients in eight key sectors — automotive, consumer electronics and PCs, E-commerce and software, financial services, media content and distribution, mobile communications and devices, networking, and semiconductors.
RPX said the agreement was unanimously approved by RPX’s board “following a thorough review of a full range of strategic, financial and capital structure alternatives, which was first announced in February 2018.”
RPX chairman Shelby Bonnie said: “Over the course of our review, the RPX board of directors evaluated a full range of strategic, financial and capital structure alternatives to best serve the interests of our stockholders, including a sale and continuing to operate as a standalone public company.
“After receiving and reviewing numerous proposals and indications of interest, as well as considering RPX’s current operations and future prospects, the board is entirely confident that this transaction provides great, certain and immediate value to RPX stockholders.”
RPX CEO Marty Roberts said: “We are thrilled to partner with HGGC to achieve our next phase of growth for our patent risk and discovery management businesses.
“This transaction provides RPX with strong financial support and added flexibility to achieve our longer-term prospects, while providing our current stockholders with secure near-term value.
“Importantly, HGGC is experienced in building technology-enabled services businesses and is fully aligned with our global team’s strategy in patent risk and discovery management services.
“With this transaction, our clients at RPX and Inventus will continue to see an uninterrupted high level of service, and we can expect even greater levels of investment in client service going forward.”
HGGC CEO Rich Lawson said: “We are big believers in RPX’s mission to deliver patent risk and discovery management solutions to its clients.
“RPX’s and Inventus’s businesses begin and end with the trust of their clients, and we will continue to serve their best interests.
“We fully support the vision of the company to build a much-needed clearinghouse in the broader market for patents and will continue RPX’s decade-long commitment to never assert patents.”
The transaction is expected to close in the second or third quarter of 2018, subject to customary closing conditions and regulatory approvals.
For RPX, GCA Advisors, LLC is acting as financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor.
Houlihan Lokey Capital, Inc.’s Tech+IP Advisory Group and Jefferies LLC are acting as financial advisors to HGGC.
Jefferies Finance LLC is acting as sole lead arranger for debt financing to be utilized by HGGC.
Kirkland and Ellis LLP is acting as legal advisor to HGGC.