Nicusa Capital Urges Shareholders to Vote Against Proposed Sale of Trintech Group, Plc.

NEW YORK, Nov. 1, 2010 /PRNewswire/ -- Nicusa Capital urges all shareholders to vote against the proposed sale of Trintech.  Nicusa believes Trintech is currently worth $US7.00 to $US8.00 per ADS and expect it to be worth considerably more over the next several years.  $US6.60 per ADS undervalues the current business, and we are not satisfied with the deal as constituted.  

Nicusa Capital Partners is a concentrated, fundamentally-driven, value-oriented private investment fund focused on smaller capitalization companies primarily in North America.  The Fund was launched in early 2003.

Dear Mr. McGuire and the Board of Directors of Trintech Group, Plc:

We are writing to you to object to the terms of the proposed sale of the Company.  

As of October 28, 2010, Nicusa owns 514,111 Trintech ADSs, representing 1,028,222 ordinary shares, or approximately 3.1%, of the outstanding shares of the Company.  

We have spent considerable time this year analyzing the Company.  We developed an extensive financial model, spoke with management on numerous occasions, and interviewed competitors and potential customers.  We believe Trintech's business alone is worth $US4.00 to $US5.00 per ADS based on the Company's growth prospects and operating leverage, and expect it to be worth considerably more over the next several years.  Adding to that value is the Company's cash of $US48.9 million, or $US2.92 per ADS, bringing the combined value to $US7.00 to $US8.00 per ADS.  

$US6.60 per ADS undervalues the current business, and we are not satisfied with the deal as constituted.  While you may be content to allow a private equity firm to capture all of the upside in the business, we are not.  We intend to vote against your deal and encourage other shareholders to do the same.

The value of the Company changed dramatically this year with the sale of its healthcare division on April 1, 2010.  The sale added $US34.5 million to the Company's balance sheet and allowed management to refocus on its core financial software business.  Proceeds from the sale were not reported on the Company's financial statement until late May.  It is misleading to value the Company before this transformative transaction.  

As you are aware, Trintech is a leading provider of financial software to many successful global companies.  We feel that the Company should be valued against companies with a similar business model and offer the following comparison.  As the table shows, the stock is easily worth more than the current offering price, and the deal does not offer any control premium to Trintech's comparables, as is normal and customary in acquisitions.  

In addition, there have been a number of comparable software acquisitions in 2010.  Against the universe of similar transactions, the premium to recent trading that we are being offered is unacceptable.  Although you state that we are being offered a 61% premium to the average closing price over the last year, your calculation is inappropriate.  

Your premium is based on an average of closing prices; more appropriate would be to calculate the premium based on a volume-weighted average closing price, as more than 30% of non-insider controlled shares have traded in the last year.  Using the more appropriate volume-weighted average, the premium is 36.3%, far less than you claim.  More importantly, because of the transformative nature of the sale of the healthcare division, which was announced 4 months prior to the accepted offer, we believe a 90-day trading average to be the most appropriate time period over which to calculate a premium.  

There have been a number of comparable software acquisitions in 2010.  Against the universe of similar transactions, the premium to 90-day volume-weighted trading average that we are being offered is unacceptable.  

The Board has accepted a low-ball offer for Trintech and is trampling on the rights of minority shareholders in the process.  We demand that you renegotiate the deal.  We encourage all shareholders to review our analysis as we believe the ADSs are worth considerably more than $US6.60.  

Furthermore, we encourage all shareholders to vote against this acquisition.  

Sincerely,

Paul Johnson

Managing member

SOURCE Nicusa Capital