Intrinsyc Technologies Corporation to be Acquired by Lantronix, Inc.

VANCOUVER, British Columbia, Oct. 31, 2019 (GLOBE NEWSWIRE) -- Intrinsyc Technologies Corporation (TSX: ITC and OTCQX: ISYRF) (“Intrinsyc” or the “Company”), a leading provider of solutions for the development of embedded and Internet of Things (“IoT”) products, today announced it has entered into an agreement (the “Arrangement Agreement”) with Lantronix, Inc. (NASDAQ: LTRX) (“Lantronix”), a global provider of secure data access and management solutions for IoT assets, pursuant to which Lantronix will acquire 100% of Intrinsyc’s issued and outstanding common shares in a cash and share transaction valued at approximately US$27 million (collectively, the “Transaction”). Under the terms of the Transaction, Intrinsyc shareholders (“Intrinsyc Shareholders”) will receive US$0.55 in cash plus 0.2135 of a Lantronix share for every common share of Intrinsyc (a “Common Share”) held (collectively, the “Consideration”). Based on the Lantronix closing price of US$3.38 on October 30, 2019 and an exchange rate of 0.75868, the Consideration is equal to Cdn$1.68 per Common Share.

The Transaction will continue to provide Intrinsyc Shareholders with direct exposure to the growth potential in IoT markets as Intrinsyc Shareholders will own approximately 16% of the stock of Lantronix post-Transaction.

“This transaction achieves our goal of increasing shareholder value by accelerating our strategic growth plan as we gain immediate scale and the resulting benefit of greater operational efficiencies through this Transaction. This arrangement also allows our investors exposure to continue to participate in the IoT marketplace while at the same time offering a measure of liquidity to shareholders,” said Daniel Marks, Chairman of the Special Committee of the Board of Directors of Intrinsyc.

Tracy Rees, Intrinsyc’s President and Chief Executive Officer, said “This transaction brings together Intrinsyc’s advanced technology solutions that enable the creation and commercialization of intelligent connected devices with Lantronix’s growing IoT platform to expand our product portfolio and market opportunities”.

Transaction Value Highlights for Intrinsyc Shareholders

The Company believes this is a highly attractive proposal for Intrinsyc Shareholders:

  • Premium valuation: The Consideration represents a premium of 27.9% to the volume weighted average price of Intrinsyc common shares on the TSX for the ten trading days prior to the date of announcement.
  • Cash component delivers immediate liquidity and value certainty: The Transaction provides a significant cash component of US$0.55 per Common Share which provides immediate liquidity and value certainty to Intrinsyc Shareholders.
  • Potential to unlock significant value through combined entity: Intrinsyc Shareholders will benefit as the Transaction will be immediately accretive creating greater scale and expected synergies. By combining with Lantronix, the resulting entity will consist of a broad portfolio of products with a wider distribution model and a management team with a proven track record for creating value for Intrinsyc Shareholders. The board of directors of Intrinsyc (the “Intrinsyc Board”) sees significant potential upside for Intrinsyc Shareholders.
  • Enhanced diversification and future growth: The combined entity will provide Intrinsyc Shareholders with continued exposure to the rapidly growing IoT industry through both the organic growth of the existing businesses and the potential for further strategic acquisitions.

Lantronix will host an investor conference call and audio webcast at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) on Thursday, October 31, 2019. To access the live conference call, investors should dial 1-844-802-2442(US) or 1-412-317-5135(international) and indicate that they are participating in the Lantronix Investor Update call. The webcast will be available simultaneously via the investor relations section of Lantronix’s website at

Terms of the Transaction

The Transaction will be carried out pursuant to the Arrangement Agreement under a court-approved statutory plan of arrangement (the “Arrangement”) governed by the Canada Business Corporations Act. Under the Arrangement Agreement, Lantronix will acquire all of the issued and outstanding Common Shares of Intrinsyc.

Intrinsyc Shareholders will receive a management information circular for a special meeting to be held to approve the Transaction, which will include further details about the Transaction, Lantronix and the combined company.

Other Matters

Intrinsyc’s Board established a special committee of independent directors (the “Special Committee”) to assist with an effort to accelerate strategic growth opportunities for the Company and to review and consider terms and conditions for potential transactions involving the Company. As a result of this mandate, the Special Committee has reviewed and overseen the negotiation of the Arrangement Agreement. The Special Committee and the Intrinsyc Board obtained a fairness opinion from TD Securities Inc. (“TD Securities”) (the “Fairness Opinion”) to the effect that, subject to the assumptions, qualifications and limitations contained therein, as at October 30, 2019, the Consideration to be received by Intrinsyc Shareholders pursuant to the Arrangement Agreement is fair, from a financial point of view, to such Intrinsyc Shareholders. The Special Committee unanimously recommended to the Intrinsyc Board that the Arrangement Agreement be approved.

The Intrinsyc Board has unanimously determined, based on, among other things, the recommendation of the Special Committee and the Fairness Opinion that the Arrangement is in the best interests of the Company and is fair to its Intrinsyc Shareholders and will recommend that Intrinsyc Shareholders vote in favour of the Arrangement. Directors and executive officers of Intrinsyc holding in aggregate approximately 14.5% of the issued and outstanding Common Shares of Intrinsyc have entered into voting and support agreements with Lantronix, pursuant to which they have agreed to vote their shares in favour of the Arrangement.

The Transaction is subject to the approval of: (i) 662/3% of the votes cast by the holders of Intrinsyc’s common shares present in person or represented by proxy, and (ii) if applicable, a simple majority of the votes cast by the holders of Common Shares after excluding any votes that are required to be excluded under Canadian Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions, all at a special meeting of the Intrinsyc Shareholders expected to be held in December 2019. The Transaction is expected to close shortly thereafter following receipt of all shareholder, court, certain third-party and stock exchange approvals.

Pursuant to the terms of the Arrangement Agreement, Intrinsyc is subject to customary non-solicitation covenants and has the benefit of customary fiduciary-out provisions. In the event a superior proposal is made to Intrinsyc, Lantronix has a five (5) business day right to match such proposal, and under certain circumstances where the Intrinsyc Board changes its recommendation or the Arrangement Agreement is terminated, Intrinsyc has agreed to pay a termination fee of US$850,000 to Lantronix.

None of the securities to be issued pursuant to the Arrangement Agreement have been or will be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and any securities issued under the Arrangement are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities Act and applicable exemptions under state securities laws. This press release does not constitute an offer to buy any securities.

It is anticipated that post-closing of the Transaction, Lantronix will continue to be listed on the NASDAQ.   

Advisors and Counsel

The Special Committee of Intrinsyc has engaged TD Securities as its exclusive financial advisor and Farris LLP as its legal advisor in connection with the Transaction. Lantronix has engaged Owen Bird Law Corporation as its legal advisors in connection with the Transaction. Intrinsyc Shareholders should consult their own tax and investment advisors with respect to the Transaction. A copy of the Arrangement Agreement will be filed on Intrinsyc’s SEDAR profile and will be available for viewing at

About Intrinsyc Technologies Corporation

Intrinsyc provides comprehensive product development services, as well as the industry’s highest-performance edge AI computing modules, to enable rapid commercialization of intelligent IoT products. Intrinsyc has successfully delivered over 1,400 client projects including sophisticated consumer and industrial IoT products like: robotics, connected cameras, smart displays, augmented reality, smart buildings, wearables, in-vehicle infotainment, and many others. Intrinsyc’s Open-Q™ System on Modules incorporate the industry’s most advanced processor technology from Qualcomm Technologies Inc., and help OEMs to rapidly bring industry leading products, with rich functionality and high performance, to market. Intrinsyc is publicly traded (TSX: ITC and OTCQX: ISYRF) and is headquartered in Vancouver, BC, Canada; with additional product development centers in Taipei, Taiwan, and Bangalore, India.

About Lantronix, Inc.

Lantronix, Inc. is a global provider of secure data access and management solutions for Internet of Things (IoT) assets. Lantronix’s mission is to be the leading supplier of IoT solutions that enable companies to dramatically simplify the creation, deployment, and management of IoT projects while providing secure access to data for applications and people.

With more than two decades of experience in creating robust machine to machine (M2M) technologies, Lantronix is an innovator in enabling our customers to build new business models and realize the possibilities of the Internet of Things. Lantronix’s connectivity solutions are deployed inside millions of machines serving a wide range of industries, including industrial, medical, security, transportation, retail, financial, environmental and government.

Lantronix is headquartered in Irvine, California.

For more information, visit

Forward-looking statements

This press release contains statements which, to the extent that they are not recitations of historical fact, may constitute forward-looking information under applicable Canadian securities legislation that involve risks and uncertainties. Such forward-looking statements or information may include statements regarding the Company’s future plans, objectives, delivery performance, revenues, or the company’s underlying assumptions. The words “may”, “would”, “could”, “will”, “likely”, “expect,” “anticipate,” “intend”, “plan”, “forecast”, “project”, “estimate” and “believe” or other similar words and phrases may identify forward-looking statements or information. Persons reading this press release are cautioned that such statements or information are only predictions, and that the Company’s actual future results or performance may be materially different. Some of the specific forward-looking information referred to in this press release includes, but is not limited to: the Transaction and the terms thereof; the expected date of completion of the Transaction; and the anticipated benefits to Intrinsyc Shareholders. There can be no assurance that the proposed transaction will be completed or that it will be completed on the terms and conditions contemplated in this press release. The proposed transaction could be modified or terminated in accordance with its terms.

Forward-looking information is based on a number of key expectations and assumptions made by the Company including, without limitation: the Transaction will be completed on the terms currently contemplated; the Transaction will be completed in accordance with the timing currently expected without any undue or expected delay; all conditions to the completion to the Transaction will be satisfied or waived in due course and the Arrangement Agreement will not be terminated prior to the completion of the Transaction; and assumptions and expectations related to premiums to the trading price of Intrinsyc and Lantronix and returns to Intrinsyc Shareholders. Although the forward-looking information contained in this press release is based on what Intrinsyc’s management believes to be reasonable assumptions, Intrinsyc cannot assure investors that actual results will be consistent with such information.

Forward-looking information is provided for the purpose of presenting information about management’s current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking information involves significant risks and uncertainties and should not be read as guarantees of future performance or results as actual results may differ materially from those expressed or implied in such forward-looking information. Those risks and uncertainties include, among other things: the Transaction may not be completed on the terms, or in accordance with the timing, currently contemplated, or at all; the Company has incurred expenses in connection with the Transaction and will be required to pay for those expenses regardless of whether or not the Transaction is completed; and Intrinsyc and Lantronix not be successful in satisfying the conditions to the Transaction.

Additional information about risks and uncertainties are described in the Company’s reports filed on SEDAR, including its Annual Information Form and financial report for the year ended December 31, 2018. All forward-looking statements made in this press release are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by the Company will be realized. The Company disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.


For more information, please contact:
George W. Reznik, CPA-CA, CBV, CFE
Chief Financial Officer
Intrinsyc Technologies Corporation
Phone: +1-604-678-3734