Shareholder makes bid for Captaris; company to continue strategic review process

By Lisa Kerner

Charlotte, N.C., March 17 - Captaris, Inc.'s board of directors formed a special committee of independent directors to oversee its strategic review process and said "multiple parties" are interested in a possible transaction with the company.

Vector Capital made an offer on Monday to acquire Captaris for $4.75 per share, a 36.1% premium to Captaris' closing price on March 14.

The offer, which includes a 30-day go-shop period and break-up fee concessions, is contingent on Captaris entering into a definitive agreement with Vector Capital before April 4.

Vector Capital gave Captaris a deadline of 5 p.m. ET on March 21 to take the offer.

The equity firm called Captaris' decision to replace Credit Suisse with RBC Capital Markets to conduct another strategic review a "delaying tactic" that comes at a cost to shareholders. Vector Capital, in a letter to the company, also questioned the company's commitment to completing the process "expeditiously."

"Despite our repeated requests, you have refused to share with us the timeline you intend to pursue. It is entirely unclear whether you intend to take weeks or many more months or whether you are even serious in your endeavor," Vector said in the letter.

"Given your history of delays and broken promises, we are understandably wary of the depth of the company's commitment to its sale," the letter said.

Vector Capital, a 10.2% shareholder, said it would like to see a "speedy sale" of Captaris to prevent further erosion of shareholder value. The investor cited the 35.6% drop in the stock price from Sept. 12, 2007, when Vector entered into a standstill agreement with Captaris, to March 14.

Captaris, based in Bellevue, Wash., develops software products that manage documents electronically and automate business processes.

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