NexJ Systems to be Acquired by Harris


NexJ Systems Inc. (“NexJ” or the “Company”) (TSX: NXJ), delivering intelligent customer management software to the financial services industry, announced today that it has entered into an arrangement agreement (the “Arrangement Agreement”) with N. Harris Computer Corporation (“NHC” or “Harris”), a wholly owned subsidiary of Constellation Software Inc. (TSX:CSU) (“Constellation”), pursuant to which Harris will acquire all of the outstanding common shares of NexJ by way of a statutory plan of arrangement under section 192 of the Canada Business Corporations Act (the “Transaction”).

Constellation is a large public company focused on, through its operating groups including the Harris operating group, investing in, and managing, software companies with mission critical products and a strong industry presence and has been operating in a variety of vertical markets for over 25 years.

NexJ is joining a financially stable and growing portfolio of companies which will support our future growth objectives. The Constellation business philosophy of long-term value realization and commitment to the companies they acquire will protect our customers’ existing and future investments in NexJ technology.

With strong financial backing, NexJ will continue to focus on building world-class CRM and Integrated Advisor Desktop (IAD) solutions for Wealth Management and Private Banking (B2C) and Corporate and Commercial Banking (B2B).

“Constellation’s buy and hold investment strategy and commitment to providing customers software for life makes Harris a perfect permanent owner of NexJ,” said Paul O’Donnell, NexJ CEO. “NexJ prides itself in its ‘customer-first’ mentality. Once NexJ is acquired by Harris, our customers who rely on our technology to support the day-to-day operations of their business will continue to receive exceptional dedicated support and services for all NexJ products.”

Under the terms of the Arrangement Agreement, each NexJ shareholder will receive cash consideration of C$0.55, on a fully diluted basis, for each NexJ share held (the “Consideration”).  The Consideration represents an approximate 45% premium to the closing price of the NexJ shares on the Toronto Stock Exchange (the “TSX”) on August 26, 2022, and an approximate 35% premium to the volume weighted average price of the NexJ shares over the last 20 trading days.

“The acquisition by Harris, a wholly owned subsidiary of Constellation (TSX:CSU) will provide the financial strength and operational support required as NexJ continues its transition to a subscription-based license model and seeks to grow its global competitiveness and provides a secure future for our customers and employees.” said Scott Beattie, Chair of NexJ’s Board.

Special Committee and Board of Directors Recommendations

NexJ’s Board of Directors (the “Board”) established a special committee of independent directors (the “Special Committee”) comprised of E. Scott Beattie (Chair), William F. Morris and David Yach, to consider the Transaction. INFOR Financial Inc. has provided a fairness opinion to the Special Committee (the “Fairness Opinion”) stating that in its opinion as of the date thereof, and based upon and subject to the assumptions, limitations and qualifications set forth therein, the Consideration to be received by the NexJ Shareholders pursuant to the Transaction is fair, from a financial point of view, to the NexJ Shareholders.

The Board, after receiving financial and legal advice, and following receipt of the Fairness Opinion and the unanimous recommendation of the Special Committee, has unanimously determined that the Transaction is in the best interests of NexJ and is unanimously recommending that NexJ Shareholders vote in favour of the Transaction.

The Transaction was approved by the Board based on consideration of the recommendation of the Special Committee, Bill Tatham abstaining as a result of his role as Executive Chairman of NexJ Health Holdings Inc., which as part of the Transaction will release the Company from certain non-competition and customer non-solicitation covenants in exchange for the release of NexJ Health Holdings Inc. from certain non-competition and customer non-solicitation covenants, surrender of certain of its shares and release of certain accounts payable owing to the Company.

In recommending the Transaction, the Special Committee and the Board considered and evaluated a number of factors, including those listed below:

  • Review of Strategic Alternatives Process. Prior to recommending the transaction, the Special Committee considered the extensive nature of NexJ’s strategic alternatives process (the “Strategic Alternatives Process”) to identify a strategic partner or purchaser for the Company which, over the period of the process, did not secure a transaction on terms considered to provide greater value with an appropriate degree of risk than the terms proposed by NHC, and in particular, (i) the public disclosure of the Company’s intent to undertake the Strategic Alternatives Process in September 2019, and the period of time over which interested parties could assess their interest in considering a potential transaction with the Company; (ii) the volatility in the capital markets which negatively impacted the process throughout 2020 and subsequently in early 2022, (iii) the extent of the efforts made by the Company and its financial advisors to identify and engage with parties having interest in a potential transaction with the Company, and, (iv) the assessment of potential transactions and their associated financial risk resulting from discussions and negotiations with parties, other than NHC, that did express interest but did not result in a transaction.

  • No Brokerage Fees or Commissions. The Transaction will allow each NexJ Shareholder to dispose of their common shares without incurring brokerage fees or commissions.

  • Company Performance and Financial Condition. The Special Committee recognized that the market dynamics and commercial challenges facing the company could not be ameliorated without additional capital to improve its competitiveness. The Special Committee considered the low likelihood of obtaining any additional equity financing for the Company, and the uncertainty and cost that would be associated with obtaining debt financing. The Special Committee has therefore concluded that without additional capital, the risk to shareholders would likely increase in the future.

  • Fairness Opinion. The Special Committee considered and relied on the Fairness Opinion and its conclusion that, as of the date thereof, and subject to the assumptions, limitations and qualifications contained therein, the consideration to be received by the NexJ Shareholders pursuant to the Transaction is fair from a financial point of view to the NexJ Shareholders.

  • Shareholder and Court Approval. The Transaction must be approved by the affirmative vote of at least 66⅔% of the votes cast by NexJ Shareholders at a special meeting to be held to consider and approve the Transaction, as well as by the Ontario court.

  • Arm’s Length Negotiations. The Transaction and the Arrangement Agreement are the result of a comprehensive negotiation process that was undertaken at arm’s length with the oversight and participation of the Special Committee and the Board and the participation of legal counsel, which resulted in an agreement with terms and conditions that are reasonable in the judgment of the Special Committee and the Board.

  • Ability to Respond to Superior Proposals. The terms and conditions of the Arrangement Agreement do not prevent a third party from making an unsolicited Acquisition Proposal (as defined in the Arrangement Agreement) and, subject to compliance with the terms of the Arrangement Agreement, the Board is not precluded from considering and responding to an unsolicited Acquisition Proposal that constitutes, or could reasonably be expected to constitute, a Superior Proposal at any time prior to obtaining the approval by NexJ Shareholders of the Transaction.

  • Interim Period Restrictions. The restrictions on the Company’s business until the Transaction is completed or the Arrangement Agreement is terminated are reasonable and are not expected to impair or materially affect the Company’s business during such period.

  • Deal Certainty. The Special Committee considered the likelihood that the Transaction would be completed in light of the customary nature of the conditions to closing under the Arrangement Agreement, and the fact that the Transaction is not subject to a financing condition.

In addition, directors, executive officers and other shareholders of NexJ, who as of the date hereof collectively hold approximately 43.8% of the NexJ Shares, have entered into voting support agreements to support the Transaction and vote their NexJ Shares in favour of the Transaction.

Transaction Details

The Transaction will be implemented by way of a statutory plan of arrangement under the Canada Business Corporations Act and will require the approval of 66 2/3% of the votes cast by NexJ Shareholders at a special meeting of NexJ Shareholders to be called to approve the Transaction (the “Special Meeting”). Pursuant to the “minority approval” requirements of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions, the Transaction must also be approved by a simple majority of the votes validly cast by the NexJ Shareholders present in person or by proxy at the Meeting, excluding the votes of Paul O’Donnell, President and CEO of NexJ, and Richard J. Broley, Chief Operating Officer of NexJ, each of whom is deemed to receive a “collateral benefit” pursuant to the Transaction as a result of the trigger of the change of control payments stipulated in their respective employment agreements.

The completion of the Transaction will also be subject to obtaining required court and other approvals and satisfaction of closing conditions customary for a transaction of this nature.  The Arrangement Agreement includes customary deal-protection provisions.  NexJ is subject to non-solicitation provisions and in certain circumstances, the Board may terminate the Arrangement Agreement in favour of an unsolicited superior proposal, subject to the payment of a termination fee of C$800,000 and subject to a right of NHC to match such superior proposal.  Such a termination fee is also payable by NexJ if the Arrangement Agreement is terminated in certain other specified circumstances, including if the Board changes its recommendation or NexJ wilfully or intentionally breaches its non-solicitation covenant.

It is anticipated that the Special Meeting will be held in October 2022. Following closing of the Transaction, the NexJ Shares would be delisted from the TSX. The Transaction is expected to close in the fourth quarter of 2022.


Celent Awarded NexJ an XCelent Award in the Advanced Technology Category, Recognizing NexJ’s CRM Technology for Wealth Management


NexJ Systems Inc. (TSX: NXJ), a provider of intelligent customer management software to the financial services industry, announced today that Celent, a global research and advisory firm for the financial services industry, has recognized NexJ for having the best CRM technology for wealth management in its recently published report CRM Platforms: North America Wealth Management Edition. Click here to download a free copy.

NexJ is Unique, Flexible and Accessible

“NexJ is regarded as a vanguard solution in our North American CRM analysis, in large part due to their AI capabilities supporting Next Best Action and content marketing,” said Awaad Aamir, Wealth Management analyst for Celent. “What sets NexJ apart is how its list of partnerships with system integrators and fintech players has made it a viable CRM tool for large Wirehouses and smaller RIAs”

NexJ Wins Award for CRM Technology

NexJ was named the winner of the XCelent award for CRM technology because of our focus on delivering enhanced client engagement capabilities. Celent believes that “a CRM platform that facilitated strong advisor-client engagement was a cornerstone for strengthening the relationship during and hopefully after the pandemic.” NexJ’s Nudge-AI suite of products does exactly that as Engage presents advisors with a dashboard of recommended activities or the Next Best Actions while Inform automates the collection of content that is hyper-personalized to a clients profile and interests, a capability that is a “key differentiator for CRM providers”.

“This recognition is extremely gratifying,” said Paul DeVriendt, Head of Products of NexJ Systems, “From our very first day we set our sights on delivering best-in-class CRM for wealth management with a strong focus on enhancing client engagement. The industry is receptive to our vision, world-class technology, and breadth of functionality and our continuous innovation fosters our long-standing relationships with the world’s leading wealth management firms.”

NexJ Focuses on Addressing the Needs of Advisors

As a niche provider of CRM for wealth management, NexJ is keenly focused on addressing the needs of advisors including capabilities that enable them to form deep connections to clients. This commitment was apparent to the authors, who noted our focus on:

  • Driving better, smarter, and more personalized engagement
  • Deep vertical-specific capabilities to drive efficiency and enhance the client experience
  • Creating an improved comprehensive view of the client for greater insights and analytics
  • Enriching functional capability with strategic product partnerships

“We are continually augmenting our enhanced client engagement software with advanced analytics capabilities while maintaining our focus on introducing functionality that assists wealth advisors build better relationships, maximize productivity, and capture a greater share of wallet,” continued Mr. DeVriendt.

Click here to read Celent’s report, XCELENT Awards 2021, CRM Platforms: North America Wealth Management Editions For more information about NexJ’s solutions, please visit or email [email protected].