PALO ALTO, Calif.--(BUSINESS WIRE)--Jumio Inc., the fast growing online and mobile credentials authentication company, today filed revised bidding procedures (the “Amended Bidding Procedures”) in the court-supervised auction process for the sale of substantially all of the company’s assets to “stalking horse bidder” Jumio Acquisition, LLC (“Jumio Acquisition”), an entity formed by Eduardo Saverin. The Amended Bidding Procedures were filed in response to objections to the Company’s Motion to Approve Postpetition Financing and Cash Collateral Use and Related Relief and Motion to Approve Bid Procedures filed by certain Jumio shareholders on April 5 and 6, 2016 (the “Objections”).
“Jumio’s priority is to facilitate an efficient and highly competitive sale process that maximizes value for all our stakeholders,” said Stephen Stuut, Jumio’s CEO. “While we believe the recently filed objections are without merit, in order to ensure the best outcome for all parties, the Company approached Jumio Acquisition and negotiated new bidding procedures. These revised procedures will eliminate the concerns raised by a sub-set of our investors, while maintaining a fair, robust and efficient auction process. We are pleased that Jumio Acquisition has agreed to these revised bidding procedures, which demonstrate Mr. Saverin’s ongoing commitment to our company by enhancing the cash component of the stalking horse bid.”
Jumio Acquisition’s initial $22.7 million stalking horse bid was comprised of three elements: $15.8 million of prepetition debt in the form of certain senior secured convertible promissory notes (the “Prepetition Secured Obligations”), $3.7 million of “debtor-in-possession” (“DIP”) financing to fund Jumio’s operations and an additional $3.2 million in cash for the benefit of the estate. The bid remains subject to higher and otherwise better bids that may be received.
In order to address claims that may be asserted with respect to the Prepetition Secured Obligations, Jumio and Jumio Acquisition have amended the bidding procedures to preserve any such potential claims while enabling Jumio to maintain a timeline which maximizes the value of its ongoing operations. The Company believes the Amended Bidding Procedures resolve all concerns raised in the Objections by ensuring that under all potential outcomes, the minimum stalking horse bid continues to be $22.7 million. Specifically:
- If other bids are received for the Company, Jumio Acquisition’s bid will commit cash to underwrite any successful challenge to the Prepetition Secured Obligations. In other words, Jumio Acquisition’s bid is indifferent to the outcome of any challenge to the Prepetition Secured Obligations, which will be resolved subsequent to the sale and distributed to the estate accordingly.
- Should no alternative bidders choose to compete against Jumio Acquisition’s stalking horse bid, then the $15.8 million of Prepetition Secured Obligations will be waived by Jumio Acquisition, maintaining the net distribution to the estate after repayment of the DIP financing. The Company noted that 50 potential purchasers have executed nondisclosure agreements and received the Company’s confidential information presentation, and multiple bidders have submitted formal indications of interest proposing cash consideration above the stalking horse bid.
The Amended Bidding Procedures will be considered by the Bankruptcy Court on Tuesday April 12, 2016.
Landis Rath & Cobb LLP is serving as legal advisor, Wilmer Cutler Pickering Hale and Dorr LLP is serving as special corporate counsel, Sagent Advisors LLC is serving as financial advisor and Ernst & Young Capital Advisors LLC is serving as restructuring advisor to Jumio.
Jumio is a leading identity management and credentials company that helps businesses reduce fraud and increase revenue while providing a fast, seamless customer experience. The company utilizes proprietary computer vision technology to reduce customer sign-up and checkout friction and verify credentials issued from over 120 countries in real-time web and mobile transactions. Jumio’s products are leveraged by a wide range of clients; from the leading internet companies to start-ups, Fortune 500 and FTSE 350 organizations in the financial services, sharing economy, retail, travel and online gaming sectors. Headquartered in Palo Alto, California, Jumio operates globally, with offices in the US and Europe, and has been the recipient of numerous awards for innovation from leading industry associations.
Statements in this press release that are not strictly historical in nature are forward-looking statements within the meaning of the federal securities laws, including statements regarding Jumio’s products and solutions, demand for its products and future growth, and its ability to obtain the approval of the Bankruptcy Court with respect to motions filed in the bankruptcy proceedings, including with respect to the asset sale and “debtor-in-possession” financing transactions. These forward-looking statements are based on current information and expectations that are inherently subject to change and involve a number of risks and uncertainties. Actual events or results might differ materially from those in any forward-looking statement due to various factors, including the terms and conditions of any reorganization plan that is ultimately approved by the Bankruptcy Court, and the actions and decisions of creditors, regulators and other third parties that have an interest in the bankruptcy proceedings. Jumio assumes no obligation to update the information in this press release, to revise any forward-looking statements or to update the reasons actual results could differ materially from those anticipated in forward-looking statements.