On February 4, 2008, the Company completed the acquisition of Helius for up to $30.5 million as the result of the merger agreement HCI entered into on December 21, 2007 (the “Merger Agreement”) with Helius, Utah Acquisition Corp., a wholly-owned subsidiary of the Company (“Merger Sub”) and The Canopy Group, Inc. and Canopy Ventures I, L.P., the primary shareholders of Helius (the “Canopy Entities”). At the closing of the acquisition, we paid $10.5 million after certain adjustments pursuant to the Merger Agreement. We are contingently obligated to pay up to an additional $20.0 million, if any, to be payable in April 2010 by the Company or Helius, as the surviving corporation, as additional purchase price, subject to Helius achieving the post-closing performance goals as set forth in the Merger Agreement.
The Company will begin to consolidate Helius’ financial statements as of the closing date and the basis of Helius’ assets and liabilities will be adjusted to their fair values. Helius’ net assets at the closing were approximately $0.6 million. In connection with the acquisition, the Company had incurred approximately $0.2 million of transaction costs, including legal, accounting and other costs directly related to the acquisition of Helius. These costs are included in Prepaid expenses and other in the accompanying Consolidated Balance Sheets.
Helius was founded in 1995 and provides broadcasting solutions focused on the data broadcasting and IP-over-satellite markets for nearly a decade. Helius offers a comprehensive portfolio of digital signage, training, distance learning, and content distribution network solutions. Helius is a privately held firm with funding from The Canopy Group. We believe that the acquisition of Helius will combine Helius’ customer base and skills as a recognized leader in providing business in internet protocol television solutions with the extensive broadband networking experience and customer base of HNS.
In February 2008, subsequent to the acquisition, the Company transferred its ownership of Helius to HNS. Helius will operate within our North America VSAT segment, due to the nature of its business activities, its customer base and similarities with the North America enterprise business.
Source: Helius
