(Bloomberg) -- Canadian software provider Dye & Durham Ltd. will review its options after a shareholder group led by management offered to buy the company for about C$3.4 billion ($2.8 billion), less than a year after it went public.
The Toronto-based company announced Monday it will form a committee of directors “to explore and evaluate potential strategic alternatives” because a management-led group is interested in taking it over for C$50.50 a share. The shares jumped 16.7% to C$47.84 as of 12:35 p.m. Monday in Toronto.
One large shareholder expressed opposition to the bid. “We think Dye & Durham is an excellent company and should remain public,” Jeff Mo, lead manager of Canadian small cap strategies at Mawer Investment Management Ltd., said in an interview. “It’s in the best interest of the company.”
Mo said he would reconsider his view if the strategic process leads to a bidding war. Mawer holds about 9% of Dye & Durham, he said.
The management offer is 23% higher than Friday’s close and more than six times the C$7.50 price of the initial public offering last July. The company said the board will consider other bidders or merger partners and will also examine a sale of assets.
Dye & Durham provides software for legal and business professionals, offering clients a platform for accessing legal registries and public records data. Its products help speed up document searches, document creation and electronic records filings.
The company has been led since 2014 by Chief Executive Officer Matthew Proud, who has expanded it through a number of acquisitions in Canada, the U.K. and Australia during his tenure.
It’s been busy making deals since going public. In December, it said it would buy DoProcess LP for C$530 million from the infrastructure arm of Ontario Municipal Employees’ Retirement System. Since January, it’s announced four more deals, including a C$94 million acquisition of U.K. real estate software firm Future Climate Info Ltd.
To help fund its acquisition spree, Dye & Durham has raised equity on five separate occasions since the IPO. The most recent was a February issue of nearly 4 million shares at C$50.50 -- the same price as the proposed takeover offer.
The company’s statement didn’t say which members of management are part of the group that wants to take the company private. The company said that, following recent acquisitions, it expects C$220 million in annualized pro forma adjusted earnings before interest, taxes, depreciation and amortization.
Last year, Matthew Proud and his brother, Avesdo Inc. Executive Chairman Tyler Proud, were part of a failed C$58 million offer for Torstar Corp., the publisher of the Toronto Star.
(Updates with shareholder opposition in third paragraph, updated share price.)
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