Norsat Enters Into Amended Definitive Agreement With Hytera Communications Co., Ltd. to be Acquired for $11.25 USD per Share

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All-cash offer price represents premium of 77% over unaffected trading price of the shares on September 16, 2016 (the date before which a shareholder of Norsat publicly expressed an interest in acquiring control of Norsat), and 82% over the 20-day volume weighted average price (“VWAP”) ending on September 16, 2016.

Transaction has unanimous support of Norsat’s Independent Directors.

Vancouver, British Columbia – May 31, 2017 – Norsat International Inc. (“Norsat” or the “Company”) (TSX: NII and NYSE MKT: NSAT), a provider of unique and customized communication solutions for remote and challenging applications, today announced that further to its news releases of September 19, 2016, March 17, 2017, March 27, 2017, April 17, 2017, May 15, 2017, May 18, 2017 and May 25, 2017, that it has entered into an amended arrangement agreement (the “Amended Arrangement Agreement”) with Hytera Project Corp. (“Hytera”), a subsidiary of Hytera Communications Co., Ltd., pursuant to which Hytera will acquire all the issued and outstanding shares of Norsat for $11.25 in United States dollars (“USD”) in cash per share, pursuant to a court-approved plan of arrangement (the “Arrangement”).  All unexercised options and restricted share units will also be acquired under the Arrangement. The proposed transaction values Norsat at an equity value of approximately $69 million USD.

“We are pleased that we were able to conclude a revised agreement with Hytera.  We continue to believe this all-cash transaction offers Norsat shareholders immediate liquidity and certainty of value. We thank our shareholders for their patience and support during the process, a process that has ultimately surfaced significant value for all Norsat shareholders,” said Fabio Doninelli, Director and Chairman of the Board.

Cash Consideration and Attractive Premium – Under the Arrangement, shareholders of Norsat will receive $11.25 USD per Norsat share in cash, offering immediate liquidity and certainty of consideration. The cash consideration per share represents a premium of 77% over the unaffected trading price of the shares on the Toronto Stock Exchange, on September 16, 2016, the last trading day prior to the announcement on September 19, 2016 by Privet, a shareholder of Norsat of its interest in acquiring Norsat. The Arrangement also represents a premium of 82% over the 20-day VWAP on the Toronto Stock Exchange ending on September 16, 2016.

Independent Directors Support and Approval – The Independent Directors have unanimously determined that the Arrangement is in the best interests of Norsat and its shareholders. The Board has received an updated opinion from its independent advisor, KPMG LLP, that as of May 30, 2017 and subject to the assumptions, limitations and qualifications set forth herein, the consideration to be received by shareholders of Norsat pursuant to the Arrangement Agreement, as amended, is fair, from a financial point of view, to shareholders of Norsat.

Details of the Arrangement and Required Approvals – The Arrangement will be subject to a number of customary conditions, including the approval of Norsat securityholders and certain regulatory approvals included under the Investment Canada Act.

The Arrangement will be considered by shareholders upon the resumption of the Annual General and Special Meeting of Norsat securityholders which was originally held on Monday, May 29, 2017 (the “Meeting”).  Following the passing of certain annual general meeting matters, the Meeting was adjourned to a date and time to be determined. The transaction will require the approval of at least 66 2/3% of the votes cast by securityholders at the meeting. If approved by securityholders, and subject to the receipt of all required regulatory approvals, the transaction is expected to close in the third quarter of 2017.

Securityholders will be provided with details of the time and date that the meeting will reconvene to consider the revised Hytera offer, as well as supplemental information to the management information circular previously distributed containing additional detailed information about the transaction and the voting procedures. The supplemental information, a copy of the amending agreement, revised plan of arrangement, and related documents will be filed with Canadian and United States securities regulators and will be available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

The Arrangement Agreement, as amended, provides for, among other things, customary non-solicitation provisions, with “fiduciary out” provisions that allow Norsat to terminate the Arrangement Agreement to accept an unsolicited superior proposal in certain circumstances, subject to payment of a termination fee of $2.5 million USD (increased from $2.0 million USD) and subject to the right of Hytera to match the superior proposal in question.

Advisors
Raymond James Ltd. is acting as financial advisor to Norsat.  KPMG LLP, an independent advisor, provided an updated Fairness Opinion to the Board in connection with the amended transaction. McMillan LLP is acting as Norsat’s legal advisor. Bayfield Strategy, Inc. is Norsat’s strategic communications advisor.

About Norsat International Inc.
Founded in 1977, Norsat International Inc. is a provider of unique and customized communication solutions for remote and challenging applications. Norsat’s products and services include leading-edge product design and development, production, distribution and infield support and service of fly-away satellite terminals, microwave components, antennas, Radio Frequency (RF) conditioning products, maritime based satellite terminals and remote network connectivity solutions. More information is available at www.norsat.com, via email at investor@norsat.com or by phone at 1-604-821-2800.

Forward Looking Statements
The discussion and analysis of this news release contains forward-looking statements concerning anticipated developments in Norsat’s operations in future periods, the adequacy of its financial resources and other events or conditions that may occur in the future. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,”, “predicts,” “potential,” “targeted,” “plans,” “possible” and similar expressions, or statements that events, conditions or results “will,” “may,” “could” or “should” occur or be achieved. These forward-looking statements include, without limitation, statements about the proposed acquisition by Hytera, the potential benefits that could arise due to the transaction, the expected closing date of the transaction, Norsat’s market opportunities, strategies, competition, expected activities and expenditures as it pursues its business plan, the adequacy of available cash resources and other statements about future events or results. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, such as business and economic risks and uncertainties. The forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made. Consequently, all forward-looking statements made in this news release are qualified by this cautionary statement and there can be no assurance that actual results or anticipated developments will be realized. For the reasons set forth above, investors should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date of this news release and Norsat assumes no obligation to update or revise them to reflect new events or circumstances, other than as required by law.

Source: Norsat

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