CPE News (9/22/2020) – Dye & Durham Limited (TSX: DND) has entered into an agreement to acquire Property Information Exchange Ltd. from MML Capital Partners for approximately £31.0 million or CDN $52.9 million.
In connection with the proposed acquisition, Dye & Durham has entered into an agreement with Canaccord Genuity Corp. for a bought deal private placement of 2,381,621 common shares at a price of $21.00 per share for gross proceeds of $50,014,041.
In addition to the treasury offering, Plantro Ltd., Seastone Invest Limited and other shareholders intend to sell 952,379 shares by way of concurrent secondary offering for gross proceeds of approximately $20 million to the selling shareholders.
The proceeds of the offering will indirectly fund the acquisition by replenishing the cash-on-hand used to finance the acquisition.
Property Information Exchange (PIE) operates under the trade name “poweredbypie” and offers cloud-based real estate due diligence products in the United Kingdom that significantly expands Dye & Durham’s footprint. PIE was majority owned by MML Capital Partners.
photo credit: Property Information Exchange
News Release
Dye & Durham Limited Announces C$53 Million Acquisition of Property Information Exchange Ltd. and C$50 Million Bought Deal Private Placement Financing
Property Information Exchange Ltd. is a leading U.K. cloud-based real estate due diligence platform
All-cash transaction is expected to be immediately accretive to shareholders on an Adjusted EBITDA basis
Acquisition of a direct in-market competitor that is expected to provide significant near-term synergies
The acquisition is consistent with Dye & Durham’s strategy of acquiring, integrating and operating core cloud-based technology businesses in its industry that have deeply imbedded customer bases
C$50 million bought deal private placement financing will assist in funding the acquisition by replenishing cash-on-hand
TORONTO, Sept. 22, 2020 /CNW/ – Dye & Durham Limited (“Dye & Durham” or the “Company”) (TSX: DND), a leading provider of cloud-based software and technology solutions designed to improve efficiency and increase productivity for legal and business professionals, announced today that it has entered into an agreement to acquire Property Information Exchange Ltd. (“PIE”), for approximately £31.0 million (approximately C$52.9 million1) (the “Acquisition”) and that it has entered into an agreement with Canaccord Genuity Corp. (“Canaccord”) to issue, on a bought deal private placement basis, 2,381,621 common shares of the Company (the “Shares”) at a price of $21 per Share (the “Offering Price”) for aggregate gross proceeds to the Company of $50,014,041 (the “Treasury Offering”).
PIE is an innovative technology company that operates under the trade name “poweredbypie” and offers cloud-based real estate due diligence products in the United Kingdom that significantly expands the Company’s footprint.
PIE was majority owned by MML Capital Partners.
“We are proud to have been part of PIE’s journey and are excited for the team at PIE,” said Richard Mayers, Partner at MML Capital Partners in London, England. “Dye & Durham were an obvious strategic home for PIE and we expect the business to flourish under their guardianship. We wish the team the best of luck for the future.”
“We expect that the acquisition of PIE will support Dye & Durham’s industry growth, as we continue to execute on our strategy of acquiring, integrating and operating core technology businesses in order to build on our expanding online platform,” said Matt Proud, Chief Executive Officer of Dye & Durham. “As the coronavirus pandemic has shown us, in an increasing virtual business world, the dependency on mission critical cloud-based software like PIE’s has never been greater, as more and more people work from home.”
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1 Based on Bank of Canada’s daily spot exchange rate of £1.00 = $1.7055 Canadian
The Acquisition is expected to:
Unlock significant near-term synergies: the acquisition of a direct in-market competitor provides Dye & Durham with an attractive opportunity to quickly integrate and streamline the offerings of the two business, which is expected to provide meaningful near-term synergies.
Create long-term shareholder value: the acquisition reinforces the Company’s goal of creating long-term value for shareholders. The high-quality technology offering of PIE, coupled with the experienced management team joining Dye & Durham, are expected to be immediately accretive and provide opportunities for the Company to continue to pursue its growth strategy.
Provide a complementary network of customers: the Acquisition brings a loyal customer base that diversifies the Company’s revenue and expands its footprint in the UK.
Canaccord Genuity acted as financial advisor and Gordons LLP was the legal advisor to Dye & Durham on the Acquisition.
Offering
In connection with the Acquisition, the Company also announced that it has entered into an agreement with Canaccord to issue, on a bought deal private placement basis, 2,381,621 Shares at the Offering Price for aggregate gross proceeds to the Company of $50,014,041. The proceeds of the Treasury Offering will indirectly fund the Acquisition by replenishing the cash-on-hand used to finance the Acquisition, ensuring Dye & Durham’s net debt to EBITDA remains low.
In addition to the the Treasury Offering of 2,381,621 Shares, the bought deal private placement also comprises a secondary offering of an aggregate of 952,379 Shares (the “Secondary Offering” and together with the Treasury Offering, the “Offering”) by Plantro Ltd., Seastone Invest Limited and other shareholders of the Company at the Offering Price. The Company will not receive any proceeds from the Secondary Offering.
The Offering is scheduled to close on or about September 30, 2020 and is subject to certain customary conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the Toronto Stock Exchange.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the United States Securities Act of 1933, as amended, and applicable state securities laws.
Outlook
With today’s announcement, the Company is providing one-time financial guidance for its first quarter 2021 financial results:
First quarter total revenue to be in the range of $20.0 million to $21.0 million; and
First quarter Adjusted EBITDA of $12.0 million to $12.5 million.
This guidance is provided to enhance visibility into the Company’s expectations for financial targets for the quarter ending September 30, 2020. Please refer to the section regarding forward-looking statements which forms an integral part of this release.
About Dye & Durham
Dye & Durham Limited is a leading provider of cloud-based software and technology solutions designed to improve efficiency and increase productivity for legal and business professionals. Dye & Durham has operations in Canada and the United Kingdom, and has a strong blue-chip customer base that includes law firms, financial service institutions, and government organizations.
Additional information can be found at www.dyedurham.com.
SOURCE Dye & Durham
For further information: For investor inquiries, please contact: Adam Peeler, LodeRock Advisors Inc., Adam.peeler@loderockadvisors.com, 416.427.1235