Client Connect business of Conduit Ltd. entered into an non-binding term sheet to acquire Perion Network Ltd (NasdaqGM:PERI) from a group of shareholders in a reverse merger transaction on July 17, 2013. Client Connect business of Conduit Ltd. entered into a share purchase agreement to acquire Perion Network Ltd (NasdaqGM:PERI) from a group of shareholders in a reverse merger transaction on September 16, 2013. The shareholders group include Leap Tide Partners, LP, Iroquois Master Fund Ltd., Iroquois Capital, LP, Globis Capital Partners LP, Kingsbrook Partners, Octagon Capital Partners, Downsview Capital, Inc., Freestone Advantage Partners L.P., Freestone Capital Management, Inc., Old School Partners, Leap Tide Offshore, Ltd, Holine Finance Ltd, CCM Master Qualified Fund, Ltd., Coghill Capital Management, LLC, Leap Tide Capital Management, Inc., Tamir Fishman Provident And Education Funds Ltd., Cranshire Capital L.P. and other shareholders.

Under the agreement, Client Connect business will be combined with Perion, which upon closing will issue to Conduit shareholders between 57-60 million shares, based on Perion's fully diluted share count at closing. Following the closing, Perion will be owned 81% by the existing Conduit shareholders and option holders and 19% by existing Perion shareholders and option holders, on a fully diluted basis. Perion will have to pay a termination fee of $6 million if to Conduit if the deal is terminated. Conduit will continue to operate and invest in its high growth emerging businesses which are not part of the transaction. The combined organization will be led by Josef Mandelbaum, Perion's current Chief Executive Officer, and Yacov Kaufman, Perion's current Chief Financial Officer, who will continue to serve in those capacities. Joshua Wine will join Perion as President and continue to lead the Client Connect business. Dror Erez, co-founder of Conduit, and Roy Gen, Conduit's Chief Financial Officer, will join Perion's Board of Directors at closing.

The transaction subject to customary closing conditions, court approvals, anti-trust authority, tax rulings, approvals of governmental authorities, execution of transitional services agreement, listing of new shares on NASDAQ and TASE and Perion's shareholders approval and is expected to close in early January 2014. Various lock-up provisions are in place for major shareholders, and no single shareholder will own more than 14% of the shares outstanding post-closing. The transaction expected to be accretive to earnings. The extraordinary general meeting of shareholders to discuss the merger is scheduled to be held on November 18, 2013. Special Committee of Directors of Perion has been established to consider the deal. As of October 15, 2013, the Audit committee and Board of Directors of Perion have approved the share purchase agreement and recommended the shareholders to accept the offer. As of November 18, 2013, Perion shareholders approved the transaction. The transaction is expected to close in January 2014.

UBS Securities LLC acted as financial advisor, Adam M. Klein of Goldfarb Seligman & Co. and Kramer Levin Naftalis and Frankel LLP acted as legal advisors for Perion Network. RBC Capital Markets acted as the fairness opinion provider for the Board of Directors of Perion. Matthew W. Caldecutt of DKC Public Relations acted as the public relations advisor for Perion. Brett Maas and Miri Segal-Scharia of MS-IR LLC acted as the investor relations advisors for Perion. O'Melveny & Myers LLP acted as legal advisor to Allen & Company LLC and RBC. Allen & Company LLC acted as financial advisor to Conduit in the transaction. Dan Shamga and Ariel Aminetzah of Meitar Liquornik Geva Leshem Tal & Co acted as the legal advisors for Conduit Ltd. American Stock Transfer & Trust Company, LLC acted as the transfer agent and D.F. King & Co., Inc. acted as the information agent for Perion. Somekh Chaikin acted as an accountant to Perion. David Fox, William Sorabella and Ellen Jakovic of Kirkland & Ellis LLP acted as legal advisors to Conduit in the transaction. Ernst & Young Israel acted as accountant for Perion Network Ltd.

Client Connect business of Conduit Ltd. completed the acquisition of Perion Network Ltd (NasdaqGM:PERI) from a group of shareholders in a reverse merger transaction on January 2, 2014.