Nuvel Announces Definitive Merger Agreement to Combine With OrangeHook, Inc.
-Upon completion, combined company will be an SEC reporting, publicly traded and fully integrated SaaS-based conglomerate of disruptive technology solutions centered on healthcare, big data, safety, and banking
-Transaction designed to establish public company platform that adds the OrangeHook suite of product and service offerings to Nuvel’s existing operations, substantially reduce Nuvel’s existing debt and preserve value opportunity for existing Nuvel shareholders
LOS GATOS, Calif. and MINNEAPOLIS, July 13, 2016 (GLOBE NEWSWIRE) -- Nuvel Holdings, Inc. (OTC PINK:NUVL) has entered into a definitive merger agreement with OrangeHook, Inc., of Minneapolis, Minnesota, a privately-held Software as a Service (SaaS) conglomerate. Upon closing of the transaction, the combined company will be fully reporting and publicly-traded and will consist of five operating entities that use complementary proprietary technology to offer disruptive and potentially life-changing applications centered on healthcare, big-data, safety and banking.
The material terms of the agreement are summarized in a Current Report on Form 8-K of Nuvel filed with the Securities and Exchange Commission on Friday, July 8, 2016. In the transaction, Nuvel will issue shares of two new classes of preferred stock to OrangeHook shareholders in exchange for all of OrangeHook’s preferred and common stock. Following the merger, Nuvel will effect a reverse split of its common stock, after which the preferred shares issued in the merger to OrangeHook’s common shareholders will convert into one share of common stock in the combined company for each share of OrangeHook common stock held immediately prior to the merger, and a substantial majority of Nuvel’s existing debt will be exchanged for equity in the combined company.
The existing shareholders of Nuvel will have the opportunity to participate in ongoing growth opportunities in the combined company. Such shareholders who hold Nuvel common stock immediately after closing of the merger (or a record date declared shortly thereafter), will be eligible to receive up to an aggregate of 357,143 shares of Nuvel common stock on a pro-rata basis if the Nuvel, Inc. operating entity achieves a $1.5 million revenue milestone, as measured and within the timeframes specified in the agreement. Based on current projections, management of the combined company is optimistic about the achievement of the earn-out milestone.
For purposes of structuring the transaction, the parties used an assumed $14 per share valuation for OrangeHook’s common stock, which is the same valuation that OrangeHook used to structure the prior acquisitions of its other portfolio companies. Based on the assumed $14 per share valuation of OrangeHook common stock, the value of these prior transactions totaled approximately $53.2 million. This assumed valuation of OrangeHook common stock was arbitrarily determined based upon pro-forma financial projections of OrangeHook management and there exists no quantifiable valuation analysis to support the same, aside from internal projections based upon existing contracts of the combined companies, among other factors.
Following the merger, the combined company will change its name to OrangeHook and plans to trade under a yet to be determined OrangeHook-related trading symbol. The combined company will immediately encompass the expanded offerings of the OrangeHook portfolio within the newly formed and recapitalized company. Subsequent to the merger, the combined company plans to apply for listing on a national securities exchange as soon as reasonably practical.
Rick Resnick, Nuvel’s CEO, commented, “This transaction allows Nuvel to more freely move forward as a result of the elimination of the vast majority of our current debt, which we believe positions the company for substantial growth and stability. We believe the transaction offers a fair exchange for existing Nuvel common shareholders through the participation in a future earn-out distribution based on a revenue milestone we are confident of achieving.”
James Mandel, OrangeHook CEO, commented, “We are very pleased to achieve the next step in our company’s evolution, which sets the stage for the public launch of our suite of disruptive and potentially life-changing applications designed to change the world we live in for the better in areas including mobile payments, healthcare information, billing and payments, data compression and storage, and emergency responder coordination. Although we acknowledge that we are setting a high bar with our operating goals, we strongly believe that customer acceptance of our solutions and the real world need for the same will validate our optimism. We expect the coordinated and sophisticated deployment of our product and service offerings will create substantial value for existing OrangeHook and Nuvel shareholders, as well as future investors.”
Subject to satisfaction or waiver of closing conditions set forth in the merger agreement, the parties expect to close on the merger portion of the transaction in August 2016 and to effect the post-merger reverse split recapitalization to be completed by approximately Labor Day.
Nuvel Holdings, Inc. seeks to engage in the business of designing, developing and selling a family of proxy and other appliances, and related software and services that secure, accelerate and optimize the delivery of business applications, Web content and other information to distributed users over private Enterprise networks, or across an enterprise's gateway to the public Internet.
OrangeHook is a holding company that accelerates the growth of selective and unique consumer, business, and governmental software applications which have the ability, in our opinion, to change the world we live in to be a better and safer place concentrating in the fields of safety, medicine, data acceleration, and banking. More at http://www.orangehook.com.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain forward-looking statements. Certain statements in this press release, including statements regarding the proposed merger between OrangeHook and Nuvel, the anticipated recapitalization, the value proposition of the transaction for existing Nuvel shareholders, targeted future revenue amounts for Nuvel, Inc. and operating results for the combined company, the anticipated completion dates for the merger and reverse split, and the assumed valuation for OrangeHook common stock (and the corresponding aggregate value of OrangeHook’s prior acquisitions), are forward-looking in nature. These statements are based on current expectations and intentions, as well as assumptions and estimates that management believed to be credible and reasonable but that are also subject to risks and uncertainties that may cause outcomes to differ from what is expected, including risks that the merger will not close in a timely manner or at all, or that the combined companies’ operating results will not meet management’s expectations.
For additional information regarding this transaction please contact the following:
Rick Resnick, CEO, Nuvel Holdings, Inc. @ email@example.com
James Mandel, CEO, OrangeHook, Inc. @ firstname.lastname@example.org