Aether Holdings has just acquired UCC Capital Corp., which provides structured finance solutions to intellectual property focused firms. The purchase, which was completed yesterday, will provide Aether with an IP centric company acquisition platform. Robert D'Loren, who was previously UCC's president and CEO, has been named as Aether's new CEO and has been appointed to the Board of Directors. David Oros will continue as chairman.
"We believe this transaction with UCC and Bob D'Loren, which resulted from our strategic work with Jefferies & Company, Inc., presents us with a unique opportunity to achieve our business objectives more quickly," Oros said. "Bob is a pioneer in the IP arena, and we believe that the UCC team can create significant value for our shareholders. With the firm's reputation and Bob's personal achievements in this industry, it is truly exciting for Aether."
"We believe the recent changes caused by technology and globalization have created great opportunities in intermediating stage industries; that is, those industries that have fundamentally strong assets, but where the business model must be changed to unlock the cash flow potential of the IP," D'Loren noted. "While we will continue with UCC's historical business, we will shift our focus to principal acquisition transactions where we can create value. I believe that with our team's experience and expertise, and with a flexible operating structure that we call a Value Net Business Model, we can maintain a large and diverse portfolio of IP centric companies. This acquisition by Aether makes great sense, and our timing could not be better."
Under the purchase's terms , Aether has bought all of UCC Capital's outstanding equity as well as several affiliated firms for 2.5 million shares of Aether common stock. Aether also said that it will pay up to another 2.5 million shares, and up to $10 million in cash, if the new business achieves specified financial targets and the price of Aether's common stock goes over specified levels within five years. Additionally, D'Loren has entered into a long-term employment arrangement with Aether that includes a combination of cash and equity bonus opportunities and a package of stock options and warrants.
Aether added that it will still operate its existing MBS business. It will decide on the future of this business based upon the outlook on MBS market conditions and the progress of its new IP strategy. The UCC acquisition will not require the firm to sell any existing MBS investments.
The firm will move its headquarters to New York City where UCC is currently based. Aether has also agreed to expand its board of directors to ten members, including D'Loren, with two additional directors he will nominate. These nominations are expected to be independent under applicable Securities and Exchange Commission and NASDAQ rules and have experience in IP strategy.