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April 16th, 2007

New shareholder

OCCAM Capital is an independent European investment fund specialized in information and telecommunication technology. On the basis of its assessment of the assets and development potential of Mandriva, OCCAM has decided to invest some €2M, thereby becoming its largest shareholder. Two OCCAM representatives will join the board of Mandriva once the transaction is completed.

Mandriva’s existing shareholders (Millennium Partners, Windhurst Participation, Jacques Le Marois, and François Bancilhon) have opted to participate alongside OCCAM in the operation. The same opportunity will be open to all Mandriva shareholders.

Investment structure

To satisfy multiple requirements, the operation is structured in two parts:

  • A €1.65M reserved capital increase, entirely subscribed by OCCAM

  • A capital increase of a minimum of €1.35M, open to all Mandriva shareholders. 75% of this tranche has been underwritten by OCCAM and Mandriva’s existing shareholders.

Both operations will be undertaken on the basis of a value of €0.34 per share, implying a pre-money valuation of €2M for the Company.

The objective of the first part of the operation is to allow OCCAM to rapidly inject funds into the company. The objective of the second is to enable existing shareholders to benefit from the same conditions as OCCAM.

The investment is subject to shareholder approval, and will be submitted at the next shareholder meeting on May 25, 2007.

The funds will be used to exit the Chapter 11 proceedings (“plan de continuation”) under which Mandriva is operating by paying back all creditors, to acquire Linbox and to strengthen the financial position of the company.

Linbox acquisition

Mandriva and Linbox had already reached an agreement in September 2006 over the acquisition of Linbox by Mandriva. At the end of 2006, significant changes in the situations of both companies forced them to put the agreement on hold. However the two companies maintained their co-operation, and this co-operation demonstrated the rationale for the operation.

As Mandriva was preparing for its current fund raising, new conditions for the acquisition were therefore negotiated. In this context it was agreed that Mandriva would acquire 100% of Linbox for €280K in cash and some €200K in Mandriva stock. This deal is also subject to shareholder approval, which will take place at the next shareholder meeting.

This acquisition will strengthen Mandriva's position in the French corporate market, bringing new customers such as Renault, Arcelor Mittal, the Ministry of Interior and the Prime Minister’s office, and adding new products such as LRS and LDS to Mandriva's portfolio of corporate products.