iPerceptions Releases Management Information Circular Recommending Amalgamation with XPND

iPerceptions Inc. (TSX-V: IPE) (iPerceptions or the Corporation) today mailed to its shareholders and filed with regulatory authorities its notice of special meeting and accompanying Management Proxy Circular (the Circular) with respect to the shareholders’ meeting (the Meeting) to be held at the offices of Norton Rose Canada LLP, 1, Place Ville Marie, suite 2500, in Montréal, Quebec. At the Meeting, shareholders will be asked to consider and vote on the proposed amalgamation with 8060975 Canada Inc., an indirectly owned, through 7929595 Canada Inc. (the Purchaser), by XPND Fund L.P. (XPND) (the Amalgamation).

The Circular contains a recommendation to the shareholders of iPerceptions (the Shareholders) that they vote their common shares of the Corporation (the Shares) in favour of the amalgamation. The board of directors of the Corporation (the Board of Directors) considered the following reasons for its recommendation:

Significant Premium

The all-cash consideration of $0.08 per Share to be received by Shareholders pursuant to the Amalgamation represents:

	(a)		a premium of approximately 100% to the closing price of the Shares on the TSX Venture Exchange Inc. (the Exchange) on January 26, 2012 (the last trading day prior to the announcement of the proposed Amalgamation on January 27, 2012);
	(b)		a premium of approximately 71% to the volume-weighted average trading price of the Shares on the Exchange for the 20 trading days prior to the announcement; and
	(c)		a premium of approximately 24% to the average of the closing prices of the Shares on the Exchange during the twenty-four months prior to the announcement.

Strategic Review Process

iPerceptions conducted a strategic review process to identify potential parties interested in acquiring all of the Shares or in participating in any other form of transaction with a view to maximizing value for all Shareholders. Following this process, the Board of Directors and the independent committee concluded that

	(a)		in light of the absence of any alternative proposal to acquire the Shares or the assets of iPerceptions, the opportunities for the minority shareholders to realize on their investment, other than through sales on the Exchange, are limited and
	(b)		the Amalgamation represented the best alternative currently available to Shareholders.

Valuation and Fairness Opinion of Modelcom

Modelcom delivered to the independent committee a written opinion to the effect that, as of January 13, 2012 and based upon and subject to the limitations, assumptions, restrictions and qualifications contained therein, (i) the fair market value of the Shares, from a purchaser basis, is $0.036 per Share and (ii) the consideration to be received by the minority shareholders under the Amalgamation is fair, from a financial point of view, to the minority shareholders.

Reasonableness of the Merger Agreement

The terms and conditions of the merger agreement entered into by iPerceptions, Newco and the Purchaser (the Merger Agreement), which were reviewed by the members of the independent committee in consultation with the Corporation’s legal advisor, were determined to be fair and reasonable and were the result of arm’s length negotiations between iPerceptions and XPND.

Ability to Respond to Superior Proposals

Under the Merger Agreement, the Board of Directors has retained the ability to consider a competing acquisition proposal not solicited by it which the Board of Directors believes, in the exercise of its fiduciary duties, represents, or could reasonably be expected to lead to, a superior proposal, and to terminate the Merger Agreement in the event of such superior proposal, subject to XPND’s right to match or be paid a termination fee of $150,000 plus an amount equal to 10% of the excess of the value of the transaction contemplated by the superior proposal and the value of the current transaction. In addition, the support and voting agreements entered into by the Corporation with the supporting Shareholders (except the support and voting agreement entered into with Telesystem Ltd.) will automatically terminate in the event of the termination of the Merger Agreement.

All-Cash Consideration

Since the Corporation’s initial listing on the Exchange, the trading price of the Shares has experienced significant volatility which can occur in response to low liquidity levels or trading volumes for the Shares. The payment of cash under the Amalgamation will provide Shareholders with immediate liquidity and certainty of value that is not subject to market fluctuations. In addition, the Amalgamation allows Shareholders to cash in their investment in iPerceptions without having to pay brokerage fees.

No Further Due Diligence

The Amalgamation is not subject to further due diligence.

No Financing Conditions

The Amalgamation is not subject to financing conditions.

Support of the Amalgamation by the Supporting Shareholders

The supporting Shareholders, who hold Shares representing approximately 47.3% of the outstanding Shares, have each entered into a support and voting agreement pursuant to which they have agreed to vote their Shares in favour of the Amalgamation, subject to certain conditions. In the case of Telesystem Ltd., such support is irrevocable.

About iPerceptions

iPerceptions is the leader in online Voice of Customer analytics, using advanced intercept surveys to gather feedback from representative samples of actual visitors. Its webValidator Continuous Listening solution and 4Q Suite solution turn millions of data points into easy-to-understand strategic and tactical decision support, while its Web Analytics Solution Profiler (WASP) provides superior web analytics quality assurance. iPerceptons’ clients include well-known brands such as Dell, InterContinental Hotels, Lenovo, General Motors, Harvard Business Review, Choice Hotels International and Monster Worldwide. For more information, please visit www.iperceptions.com.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this press release.