SofTech has agreed to sell its CADRA product line to Mentor Graphics for $3.2 million, plus potential earn-out payments of up to an additional $750,000 based on 10 percent of CADRA revenue generated by Mentor in the three year period following the closing.
The closing of this asset sale, which is subject to stockholder approval and other customary closing conditions and terms, is expected to occur no later than Nov. 30, 2013. The transaction is not subject to any financing condition.
The transaction is subject to stockholder approval by two-thirds of SofTech's shareholders. SofTech intends to file a proxy statement with respect to a special meeting of the stockholders to seek that approval. The SofTech board of directors unanimously approved the transaction and recommends that the company's stockholders vote in favor of the asset sale.
"In March 2011, the existing SofTech management team bought a controlling interest in the company after it had struggled to meet its financial obligations," said Joe Mullaney, SofTech CEO. "Over the last two and a half years we have repositioned SofTech by significantly improving its financial position, investing in new products, and entering into technology partnerships with disruptive technology companies to offer compelling solutions in the PLM market. This transaction will allow us to focus our attention and resources on those strategic initiatives, certain of which we have experienced demonstrated market activity, while also significantly enhancing our financial position."
For more information, visit SofTech.
Sources: Press materials received from the company and additional information gleaned from the company's website.