Huge Group’s effort to acquire Adapt IT appears to be dead in the water. This is after Canada’s Volaris Group offered shareholders R6.50/share in cash on Wednesday for the JSE-listed software services group.
Whereas Huge’s bid is seen as hostile by Adapt IT management, the Volaris deal looks altogether friendlier.
Adapt IT said Volaris has offered to buy 100% of Adapt IT. However, as part of the scheme, Adapt IT shareholders are entitled to elect to retain all or part of their shares in the to-be-delisted firm.
It said the cash consideration is a 56.9% premium to the 30-day average share price for Adapt IT. It is also a premium to the R5.52/share all-share offer from Huge Group.
As with the Huge Group approach, Adapt IT has created an independent board, made up of non-executive directors, to assess the reasonableness of the Volaris offer. Unlike with the Huge offer, where the independent board has yet to pronounce, the board has already said it will recommend to shareholders that they vote in favour of the Volaris offer.
Adapt IT shareholders collectively holding 21.6% have already furnished irrevocable undertakings in support of the deal.
Volaris, which specialises in buying “vertical-market software companies” (of which Adapt IT is one), is part of the Toronto-listed Constellation Software, which has a market capitalisation of about US$25-billion.
“Successful conclusion of the Volaris offer will result in a well-governed and diversified South African technology company with high growth ambitions being backed by a well-capitalised and leading global technology firm keen to support this growth,” Adapt IT said in a statement to shareholders.
“Volaris will be able to support the existing Adapt IT management team with capital, global reach and best practices to aid the development of the Adapt IT business and further advance the value they deliver to customers. In turn, Adapt IT will come to represent Volaris’s interests on the African continent, a region in which it currently has limited presence but intends to grow in the coming years. Volaris is confident that its long-term operating philosophy will create sustainable growth for Adapt IT, its management, its employees, its customers, its partners and the broader community.” — © 2021 NewsCentral Media