CSP Inc. (NASDAQ:CSPI) Files An 8-K Completion of Acquisition or Disposition of AssetsItem 2.01. Completion of Acquisition or Disposition of Assets.
On July 31, 2018, CSP Inc., a Massachusetts corporation (the “Company” or “CSP”), announced the completion of the Company’s sale of all of the stock of Modcomp GmbH, a limited liability company incorporated under the laws of Germany (“Modcomp Germany”), to Reply AG, a German stock corporation (“Reply AG”), an affiliate of Reply SpA, a worldwide group of companies (the “Reply Group”), to the terms of a Share Purchase and Assignment Agreement dated June 27, 2018 (the “Share Purchase Agreement”) by and among CSPI LTD, an indirect wholly owned subsidiary of the Company (“CSPI”), and Reply AG. Modcomp Germany through itself and its wholly owned subsidiaries provided managed security services to customers primarily in Germany. Reference is made to the Share Purchase Agreement, which is Exhibit 2.1 to this Current Report on Form 8-K.
Upon the closing of the Share Purchase Agreement, Reply AG paid to CSPI total cash at closing of approximately EUR12,343,000, which consists of the original purchase price of EUR10,000,000 plus an adjustment at closing for Net Cash (as defined in the Share Purchase Agreement) of approximately EUR2,343,000. The Net Cash number is subject to certain post-closing adjustments as set forth in the Share Purchase Agreement. CSPI and Reply AG have entered into a customary escrow agreement for a three (3) year period with an aggregate holdback from the total cash consideration of EUR400,000, covering indemnity claims for certain employee matters.
The Share Purchase Agreement contains customary representations and warranties of CSPI and Reply AG as set forth therein. In addition, to and subject to the terms and conditions in the Share Purchase Agreement, CSPI has agreed to indemnify Reply AG for certain pre-closing taxes.
to the Share Purchase Agreement, CSPI has agreed that for a period of three (3) years following July 31, 2018, the closing date, CSPI shall not directly or indirectly, except with respect to CSPI’s continued business in the United Kingdom, (i) engage in performing services in Germany competing with Modcomp Germany’s managed security services business as conducted as of July 31, 2018 (the “Business”); (ii) have any controlling ownership or equity interest in any business, entity or enterprise that engages in the Business in Germany as conducted as of July 31, 2018, subject to limited exceptions; or (iii) solicit the employment of any person who as of July 31, 2018 and still at the time of solicitation is an employee of any of the acquired companies, except with the prior written authorization of Reply AG. The foregoing restricted covenants do not prohibit CSPI’s sale of tangible personal products in Germany, whether related or unrelated to managed security services.
Reply AG and the Reply Group had no material relationship with the Company or any of its affiliates, or any director or officer of the Company or any associate of any such director of officer of the Company, other than in respect of the transaction described above.
On July 31, 2018, the Company issued a press release announcing the completion of the sale of its Germany operations to Reply AG. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
Item 9.01Financial Statements and Exhibits.
(d)Exhibits
|
2.1 |
Share Purchase and Assignment Agreement dated June 27, 2018, by and between CSPI LTD, as Seller, and Reply AG, as Purchaser, and Modcomp, Inc, as Guarantor.* |
*Incorporated by reference to Exhibit 2.1 of CSP’s Current Report on Form 8-K filed on June 27, 2018.
CSP INC /MA/ ExhibitEX-99.1 2 a8-kex991pressrelease.htm EXHIBIT 99.1 Exhibit Exhibit 99.1CSPi Closes on Sale of Germany OperationsCompany to Focus Increased Time and Resources on Higher-Margin Managed Services OpportunitiesLOWELL,…To view the full exhibit click here
About CSP Inc. (NASDAQ:CSPI)
CSP Inc. (CSPI) and its subsidiaries develop and market information technology (IT) integration solutions, advanced security and managed services and purpose built network adapters, as well as cluster computer systems. The Company operates through two segments: High Performance Products (HPP) and Technology Solutions (TS). Its HPP segment designs and manufactures computing systems for digital signal processing (DSP) applications within the defense market and network Ethernet adapters that are offered to both commercial and government customers. Its TS segment consists of the computer managed services, integration services, and third-party computer hardware and software value added reseller (VAR) businesses of its Modcomp subsidiary (TS). TS provides professional services for complex IT environments, including advanced security; unified communications and collaboration; wireless and mobility; data center solutions, and network solutions. TS also provides managed IT services.