The business combination will be effected through a newly-formed company, Cambium-Voyager Holdings, Inc., which will acquire both companies and issue shares in the combined company to stockholders of each of Voyager Learning Company and Cambium Learning. Cambium-Voyager Holdings will be majority owned by VSS-Cambium Holdings III, LLC, which will be majority owned by Veronis Suhler Stevenson, a leading private equity investor in the information, education and media industries and current owner of Cambium Learning. Upon completion of the mergers, Cambium-Voyager Holdings will be a public company, and anticipates having its common stock approved for listing on the NASDAQ Global Market.
Under the terms of the merger agreement, each Voyager Learning Company stockholder will be entitled to receive, in exchange for each share of Voyager Learning Company common stock owned by such stockholder, the following consideration: (i) at the election of the stockholder, either one share of common stock of Cambium-Voyager Holdings or $6.50 in cash, subject to a potential pro-rata reduction as described below; and (ii) a pro-rata amount of certain tax refunds received by Voyager Learning Company prior to the closing of the transaction; and (iii) a contingent value right payable periodically during the period commencing nine months after closing and expected to end on or about October 15, 2013. Neither the amount of the tax refund distribution nor the maximum value of the contingent value right can be determined at this time. However, the total per-share amount payable in respect of both of these two forms of consideration on a combined basis is not expected to exceed $0.89 per share of Voyager Learning Company common stock and may be substantially less than that amount, depending on certain factors specified in the merger agreement.
In the aggregate, the Voyager Learning Company stockholders will receive consideration of approximately $194 million (excluding contingent value rights and distributions of certain tax refunds received prior to closing), based on the agreed price of $6.50 per share used by the parties to determine the relative contribution of the two companies. The sole stockholder of Cambium Learning will receive aggregate consideration of approximately $158 million (excluding the warrants described below), consisting of 20,454,312 shares of Cambium-Voyager Holdings common stock issued in the merger at the ascribed value of $6.50 per share. In addition, the stockholder of Cambium Learning will receive a warrant to purchase additional shares of Cambium-Voyager Holdings common stock based on the amount of Cambium Learning debt retired prior to closing and certain other agreed upon matters. In connection with the transaction, the combined company will assume approximately $168 million of indebtedness of Cambium Learning, for total consideration under the merger agreement of approximately $520 million.
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