Vector Capital not satisfied with Captaris' response to its $4.75-per-share offer for the company

By Lisa Kerner

Charlotte, N.C., March 25 - Captaris Inc. investor Vector Capital was "extremely disappointed" in the company's response to its offer to buy the company for $4.75 per share.

The offer price is a 36.1% premium to Captaris' closing price on March 14.

In a March 21 letter to Captaris' board of directors, Vector Capital said the board refuses to "engage in any meaningful discussions" about the offer, which represents "immediate and certain value."

The offer does not preclude Captaris from continuing its review of strategic alternatives.

Specifically, Vector Capital, a 10.2% shareholder, said it is disappointed that:

• No one from Captaris or its banking and legal advisers has contacted Vector Capital to ask any questions about the offer;

• Captaris has not offered to meet with Vector Capital;

• No information has been provided on the sale process or a timeline;

• No additional due diligence access has been provided; and

• Captaris or its advisers have not attempted to negotiate price, due diligence, length of the go-shop period or any other terms of the private equity firm's proposal.

Vector Capital reiterated its offer to acquire Captaris at the $4.75 price and committed to providing a draft of the definitive agreement within 24 hours of the offer's acceptance.

In addition, Vector Capital said it is willing to minimize its due diligence to a tightly focused, seven-day timeframe, the letter said.

If Captaris signs a definitive agreement by April 4, Vector Capital will extend the go-shop period to 45 days, until May 19, and cap its expense reimbursement at $1 million if a higher bid is accepted.

"By pursuing this proposal, the company can seek to avoid further erosion to shareholder value and damage to Captaris' future market value and prospects while preserving its ability to run a full process," Vector Capital said in its letter.

The offer is open until 12 p.m. ET on Thursday.

Captaris, in its March 21 letter to Vector Capital, said it was "committed to an expeditious process to identify and pursue the strategic alternative" that best enhances shareholder value.

According to the letter, Captaris did not plan to preempt its strategic review process to negotiate with Vector Capital.

It was previously reported that Captaris acknowledged receipt of Vector Capital's unsolicited offer on March 18. A special committee of independent board members will evaluate the proposal as part of Captaris' evaluation of strategic alternatives, a prior Captaris company news release stated.

RBC Capital Markets and Credit Suisse are acting as financial advisers to Captaris.

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

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