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EXHIBIT 99.1
FORM 27
MATERIAL CHANGE REPORT UNDER
SECTION 75(2) OF THE SECURITIES ACT (ONTARIO)
ITEM 1. REPORTING ISSUER
The full name of the reporting issuer is 724 SOLUTIONS INC.
whose principal office is located at 4101 Yonge Street, Suite
702, Toronto, Ontario, M2P 1N6.
ITEM 2. DATE OF MATERIAL CHANGE
The effective date of the material change herein reported is
November 29, 2000.
ITEM 3. PRESS RELEASE
The press release issued pursuant to section 75(1) of the
Securities Act (Ontario) was issued on November 29, 2000 at
Toronto, Ontario. The press release was widely disseminated.
ITEM 4. SUMMARY OF MATERIAL CHANGE
724 Solutions Inc. and TANTAU Software, Inc. have entered into
a definitive agreement under which 724 Solutions Inc. will
acquire TANTAU Software, Inc. in an all-stock transaction. The
purchase price will be satisfied by (i) the issuance of 724
Solutions Inc. common shares; and (ii) the assumption of
TANTAU employee stock options, in respect of an aggregate of
19 million 724 Solutions Inc. common shares, valued at
approximately US$ 375 million (based on the closing price of
724 Solutions Inc.'s common shares on NASDAQ on November 28,
2000) on a fully diluted basis. TANTAU Software, Inc. is a
privately held company with a leading integrated platform
enabling enterprises to conduct high volume, secure mobile
transactions. The transaction is subject to customary closing
conditions including compliance with the Hart-Scott Rodino
Antitrust Improvements Act, and the registration of the new
shares to be issued by 724 Solutions Inc. at closing. Closing
is expected to occur in the first quarter of fiscal year 2001.
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ITEM 5 FULL DESCRIPTION OF MATERIAL CHANGE
The material change is described in the press release dated
November 29, 2000 attached hereto, which is hereby
incorporated by reference herein.
ITEM 6. CONFIDENTIAL REPORT
Not applicable.
ITEM 7. OMITTED INFORMATION
No significant facts have been omitted from this report.
ITEM 8. SENIOR OFFICER
Further information regarding the matters described in this
report may be obtained from Christopher Erickson, President,
who is knowledgeable about the details of the material change
and may be contacted at (416) 226-2147.
THE FOREGOING ACCURATELY DISCLOSES THE MATERIAL CHANGE REFERRED TO HEREIN.
THIS REPORT IS EXECUTED AT TORONTO, ONTARIO THIS 30th DAY OF NOVEMBER, 2000.
/s/ CHRISTOPHER ERICKSON
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Christopher Erickson
President,
724 Solutions Inc.
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[EXPLANATORY NOTE: THE FOLLOWING PRESS RELEASE WAS PREVIOUSLY FILED BY 724
SOLUTIONS INC. ON NOVEMBER 29, 2000 UNDER COVER OF FORM 425]
FOR IMMEDIATE RELEASE
724 SOLUTIONS TO ACQUIRE TANTAU SOFTWARE
COMBINATION CREATES PREMIER GLOBAL PROVIDER OF INFRASTRUCTURE AND APPLICATION
SOFTWARE FOR FINANCIAL INSTITUTIONS, ENABLING SECURE MOBILE TRANSACTIONS
724 SOLUTIONS' CHAIRMAN AND CEO GREG WOLFOND TO BE CHAIRMAN; TANTAU PRESIDENT
AND CEO JOHN SIMS TO LEAD COMBINED COMPANY AS CEO
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TORONTO, CANADA AND AUSTIN, TEXAS, NOVEMBER 29, 2000 - 724 Solutions
Inc. (NASDAQ: SVNX and TSE: SVN), a leading provider of Internet
infrastructure software enabling clients to offer secure online banking,
brokerage and e-commerce services across Internet-enabled wireless devices,
and TANTAU Software, Inc., a provider of software platforms that enable
enterprises to conduct high-volume, secure, mobile transactions, jointly
announced today that they have entered into a definitive agreement under
which 724 Solutions will acquire TANTAU in an all-stock transaction currently
valued at approximately $375 million on a fully diluted basis, based on 724
Solutions' closing stock price on November 28, 2000.
Under the terms of the acquisition agreement, unanimously approved by
the Boards of Directors of both companies, 724 Solutions will issue 19 million
shares, including shares issuable upon the exercise of TANTAU options that will
be assumed by 724 Solutions. Upon completion of the transaction, 724 Solutions
shareholders will own approximately 68 percent of the combined company and
TANTAU shareholders will own approximately 32 percent, on a fully diluted basis.
The transaction will be accounted for as a purchase and is expected to close
during the first quarter of 2001.
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Founded by a core team from Tandem's High Performance Research
Center with unique experience in building high-scale mission critical
transaction based systems, TANTAU Software is a privately held company with a
leading integrated platform enabling enterprises to conduct high volume,
secure mobile transactions. TANTAU's current customers are primarily blue
chip financial services institutions, including Chase Manhattan Bank,
Commerzbank, Credit Suisse Group, MeritaNordbanken, the New Zealand Stock
Exchange, Rabobank International, and SE Banken. Headquartered in Austin,
Texas, the company has a total of 175 employees in sales and development
offices throughout Europe, the United States, Australia, and Japan, with
significant engineering operations in Germany, Switzerland and Finland.
Investors in TANTAU include Nokia, Hewlett Packard, Compaq, Chase Capital
Partners and General Motors Investment Management.
Through this acquisition, 724 Solutions expects to enhance its
position as a premier worldwide provider of highly scalable infrastructure
and application software enabling secure mobile transactions through
Internet-enabled wireless and consumer electronics devices. TANTAU's
established presence in Europe significantly complements 724 Solutions'
strong customer base in North America, which includes BBVA Bancomer, Bank of
America, Bank of Montreal, ClarityBank.com, Citigroup, Hanvit Bank, Key Corp,
Wachovia and Wells Fargo. The companies' combined customers serve
approximately 272 million consumers worldwide.
Greg Wolfond, founder, current chairman and chief executive officer
of 724 Solutions, will continue to serve as chairman of the company. TANTAU
co-founder, president and chief executive officer John Sims will serve as
chief executive officer of 724 Solutions. Karen Basian, chief financial
officer of 724 Solutions, will continue in her current position. As a part of
the transaction, four directors will be added to 724 Solutions' Board from
TANTAU, including John Sims. 724 Solutions will maintain executive offices in
Toronto, Canada and Austin, Texas.
724 Solutions and TANTAU are seeking to substantially improve their
combined operating performance and add additional customers worldwide.
Combined, the companies will have cash and equivalents in excess of $200
million, providing a strong platform for further growth.
"By bringing together these two highly complementary companies we
expect to significantly accelerate 724 Solutions' business plan and path to
profitability and position the company to drive and capitalize more rapidly
on the increasing demand among financial institutions, merchants and other
enterprises for scalable wireless infrastructure," said Wolfond. "Together,
we have a strong, global footprint, a high-caliber, complementary customer
base, top industry talent, and the ability to offer superior solutions across
a single, secure platform. We expect to play a significant role in the growth
of mobile transactions - which analysts expect to grow to approximately $21
billion over the next four years in the United States alone, compared to an
estimated $29 million in 2000."
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"This combination brings together two leading providers of
applications and infrastructure for secure mobile transactions into one
strongly positioned global company poised to monetize the mobile Internet,"
said Sims. "With very little overlap between our companies, we expect a
seamless integration, and we expect to begin capitalizing quickly on our
combined strengths. Together, our customer base clearly distinguishes us as
the leading provider of end-to-end wireless transaction solutions in the
financial services sector - a major driver behind the adoption of wireless
Internet technology - and provides tremendous opportunities as we continue to
build aggressively on our position in this sector. We plan to leverage the
combined size and scale of the businesses and our strategic OEM and reseller
relationships to drive the growth of mobile transactions into additional
vertical applications."
Sims has 23 years of experience in the telecommunications and software
industries. Prior to founding TANTAU in February of 1999, he served as chief
operating officer of SCC Communications Corp., a provider of advanced
telecommunications, where he was instrumental in managing the company's growth,
resulting in a successful initial public offering in mid-1998. Before joining
SCC in 1995, Sims spent ten years with Tandem Computers, Inc. where he held
various executive level positions including vice president and general manager
of Tandem's worldwide telecommunications business. He served on the board of
directors of various Tandem subsidiaries and joint venture companies including
software company joint ventures in Singapore and China.
Commenting on the appointment of Sims as CEO of 724 Solutions,
Wolfond said, "John brings a tremendous track record for driving growth and
generating profitability in the software solutions business. He is clearly
the ideal choice to lead our team as we take our combined company to the next
level."
The transaction is subject to customary closing conditions including
compliance with the Hart-Scott Rodino Antitrust Improvements Act, and the
registration of the new shares to be issued by 724 Solutions at the closing.
The parties expect that approximately 17 million shares of the 19 million
total shares subject to the merger will be issued at the closing. The
remainder will be subject to options assumed by 724 Solutions.
724 Solutions will host a conference call to discuss the acquisition of
TANTAU Software today at 4:30 p.m. (EST). The conference call will be accessible
via the World Wide Web at HTTP://www.724.com.
ABOUT TANTAU
TANTAU Software Inc. is a global provider of software and
professional services that enable enterprises to conduct high-volume, secure,
mobile ecommerce transactions while maintaining direct access to their
customer. Headquartered in Austin, Texas, TANTAU is a global
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company with development and sales offices around the world, including
Australia, Finland, Germany, Japan, the Netherlands, Switzerland, the United
Kingdom and the United States. More information can be found on TANTAU's Web
site at www.tantau.com.
ABOUT 724 SOLUTIONS INC.
724 Solutions is the premier Internet infrastructure solutions
provider to financial institutions, enabling them to offer personalized and
secure mobile banking, investment, and commerce services across a wide range
of Internet-enabled wireless and consumer electronic devices. The company
provides end-to-end customer support through its global application hosting
and contact center services. 724 Solutions' customers comprise world-class
financial institutions whose combined customer bases total more than 180
million consumers. 724 Solutions' common shares are listed on the NASDAQ
National Market (SVNX) and The Toronto Stock Exchange (SVN). Headquartered in
Toronto, Canada, the company has offices in London, Paris, San Francisco,
Santa Clara, Sydney, and Tokyo. Its subsidiary Spyonit.com is based in
Chicago. For additional information visit www.724.com.
THIS PRESS RELEASE DOES NOT CONSTITUTE AN OFFER OR SALE OF
SECURITIES. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE PROSPECTUS
REGARDING THE BUSINESS COMBINATION TRANSACTION REFERENCED HEREIN, WHEN IT IS
FILED BY 724 SOLUTIONS INC. AND BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION. INVESTORS AND SECURITY HOLDERS WILL BE ABLE TO OBTAIN
A FREE COPY OF THE PROSPECTUS AND OTHER DOCUMENTS FILED BY 724 SOLUTIONS AND
TANTAU SOFTWARE WHEN THEY BECOME AVAILABLE WITH THE SECURITIES EXCHANGE
COMMISSION AT THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE PROSPECTUS AND
SUCH OTHER DOCUMENTS MAY ALSO BE OBTAINED WITHOUT CHARGE FROM 724 SOLUTIONS
BY DIRECTING YOUR REQUEST TO: MONICA ZAIED AT [email protected]
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FORWARD LOOKING STATEMENTS
This press release contains statements that are forward-looking as
that term is defined by the United States Private Securities Litigation
Reform Act of 1995. These statements include the statements herein about the
business and affairs of 724 Solutions and TANTAU Software after the
completion of the merger, including the companies' combined competitive
position, product offerings and customer base; the companies improved
operating performance; the growth in demand for the companies' products; and,
the growth in mobile transactions, are based on current expectations that are
subject to risks and uncertainties that could cause actual results to differ
materially from those described in the forward-looking statements. In
particular, the following factors, among others, could cause actual results
to differ materially from those described in the forward-looking statements:
any inability to satisfy the conditions for the closing of the merger; any
inability to obtain the required governmental approvals for the merger and
the registration of the shares; the risk that 724 Solutions' and TANTAU
Software's businesses will not be integrated efficiently and successfully;
costs related to the merger; any delay, inability or difficulties encountered
in increasing 724 Solutions' and TANTAU's combined revenues from their
existing and new contracts; demand by financial institutions and consumers
for mobile banking and brokerage services; competitive products and pricing,
any ability of 724 Solutions and TANTAU to offer enhanced product offerings;
any ability that we may have to manage and grow our expanding international
operations, and other factors. Readers are referred to 724 Solutions' report
filed with the Securities and Exchange Commission on Form 20-F, and its
filings furnished to the Securities and Exchange Commission under cover of
Form 6-K.
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CONTACTS:
724 SOLUTIONS INC. TANTAU SOFTWARE, INC.
Ray McManus (Media) Brooke Bulow (Media)
724 Solutions Inc. TANTAU Software (U.S.)
(416) 228-8191 (516) 306-4206
[email protected] [email protected]
Hugh Burns/Andrew Cole (Media) Misty Zelent (Media)
Citigate Sard Verbinnen Lois Paul & Partners
(212) 687-8080 (512) 638-5315
[email protected] [email protected]
[email protected]
Sion Roberts (Media)
Monica Zaied (Investors) TANTAU Software (Europe)
724 Solutions 44-1727-884-952
(416) 228-2369 [email protected]
[email protected]
Jessie Hennion (Media)
Brodeur Worldwide
(671) 587-2843
[email protected]
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