Investment highlights

·Low risk – Jim Skippen’s departure appears to be amicable and we see low risk of a volatile handover. Mr. Skippen has agreed to stay on as President and CEO as long as necessary to find his replacement. As well, he has left the door open for an overlap with his replacement and will retain his seat on WiLAN’s board of directors

·Don't expect a short search process – WiLAN’s board has formed a special committee to conduct a search for a new permanent CEO with the assistance of a leading search firm. Jim Skippen has a rare set of skills which will make it difficult to find a replacement and we believe this could take some time. Mr Skippen has experience as a public company CEO (since 2006) of a cross-listed firm in addition to deep domain knowledge from experience at MOSAID, a competing patent licensing operation as well as external and internal legal practitioner experience. WiLAN does have a strong and long tenured pool of internal candidates. External candidates are likely to be sought from competitive patent assertion entities or from internal patent licensing programs of technology companies. We also note that a candidate may be found in the US or Canada given approximately 1/3 of WiLAN employees are located in California.

Valuation

WiLAN currently trades at 3.3x C2016E EV/EBITDA and 6.0x C2016E adj. EPS, at a discount to the peer average of 8.3x and 16.4x, respectively.