Report: Symon Acquired By “Blank Check Company”

December 17, 2012 by Dave Haynes

I could probably read this convoluted news release 20 times and not get it entirely right – accountants and lawyers should not write press releases – but from what I can tell a “blank check company” called SCG Financial Acquisition Corp. has entered into a non-binding letter of intent to acquire digital signage software provider Symon Communications, Inc.

The release also suggests SCG has entered into an equity commitment agreement that is part of a “proposed business combination” with RMG Networks.

Get your decoder rings out and set to Full:

SCG Financial Acquisition Corp. (the “Company“) (NasdaqCM: SCGQ), announced today that it has entered into an equity commitment letter agreement (the “Equity Commitment Agreement“) with 2012 DOOH Investments LLC, an affiliate of Donald R. Wilson, Jr. (“Buyer“), pursuant to which Buyer has agreed to purchase, from the Company and/or in the open market or through privately-negotiated transactions, an aggregate of 2,350,000 shares of the Company’s common stock, par value $0.0001 per share (the “SCG Shares“), prior to the closing of the Company’s previously announced proposed initial business combination with RMG Networks, Inc. (“RMG“).  Buyer has also agreed not to exercise its redemption rights with respect to these SCG Shares in connection with the anticipated tender offer by the Company to purchase SCG Shares in connection with the closing of the proposed RMG acquisition.   This commitment by Buyer is designed to provide the Company with sufficient financial resources to consummate the Company’s proposed acquisition of RMG.  The proposed RMG acquisition is subject to the parties entering into definitive agreements and satisfaction of customary closing conditions.

Additionally, the Company announced today that it has entered into a non-binding letter of intent to acquire Symon Communications, Inc. (“Symon“), a turn-key provider of digital signage and communications solutions (the “Letter of Intent“).  The Letter of Intent is subject to the execution of definitive agreements, and the transaction with Symon, if ultimately consummated, would occur following the closing of the proposed initial business combination between the Company and RMG.

“I am extremely excited that Don, through one of his affiliates, has agreed to provide this equity commitment in support of the proposed initial business combination between SCG and RMG,” said Gregory H. Sachs, Chairman and Chief Executive Officer of the Company.  “This equity commitment is designed to provide SCG with all of the financial resources that are expected to be required to close the potential initial business combination with RMG,” stated Mr. Sachs.

About SCG Financial Acquisition Corp.

The Company is a blank check company formed for the purpose of acquiring or merging with an operating business.  The Company will not be required to make an acquisition in a particular industry or geographic region.

I poked around and could find very little except regurgitations of the press release, but did find a story on a legal news publication, Law 360, that clears the fog at least a little.

SCG Financial Acquisition Corp. is a publicly listed shell company that has an investor mandate to complete a deal within a certain time-frame, and in this case, says Law 360, it had to nail something down in the next month or the $80 million it raised in an IPO last year ran the risk of being forfeited.

There is no indication of the value of the Symon deal, but as noted, they have $80 million or so to work with. The company is based in Chicago and you can read a NASDAQ profile here …

Charles Ansley, President and CEO of Symon, confirmed the story is accurate, but didn’t want to get into details: “We have entered the Due Diligence process with the SCG team at this time. Everyone at Symon is positive about this new development. It would be inappropriate to comment further.”