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Manulife Financial Corp. has begun cashing in what is likely to be a nine-figure windfall from its private investment in legal software consolidator Dye & Durham Ltd. less than three years ago.

The financial services giant’s private equity arm, Manulife Capital, invested $15-million in Dye & Durham in April, 2018, several months before D&D’s first, aborted IPO. When it did finally go public last July at $7.50 a share, Manulife’s 3,733,156-share stake was worth $28-million.

Since then, the stock has taken off, partly due to heavy demand for tech stocks during the pandemic, as well as strong investor support for D&D’s consolidation plan, which involves buying up other providers of legal software and services and jacking up prices by 15 per cent to 20 per cent. The stock shot up 27 per cent on Dec. 10 when D&D announced it would buy DoPorocess LP, Canada’s largest provider of real estate practice management software, for $530-million, its biggest deal to date.

The stock has since traded consistently above $40 a share and as high as $53.68, giving D&D a market capitalization of more than $2.7-billion.

Earlier this week it announced that six shareholders, including chief executive Matthew Proud, would sell a combined 4.1 million shares in a $175-million bought deal underwritten by Canaccord Genuity.

Manulife Capital is one of the divesting shareholders. It is selling 1.52 million shares, or 40 per cent of its stake, for gross proceeds of $65-million, less a 3.75-per-cent commission. That leaves Manulife with another 2,213,156 shares, worth more than $95-million at Wednesday’s closing price.

Even if its remaining stock had no value, Manulife would have already quadrupled its investment in just less than three years. It is poised to do far better than that, with paper holdings and share sale proceeds that now represent a tenfold return on its initial investment.

Meanwhile, other parts of the vast Manulife empire have bought into the D&D story, with other funds or client accounts buying a combined 2.64 million shares last August and November, according to filings with regulators.

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