The Toronto Stock Exchange X-T is set to lose yet another Canadian technology company after digital commerce technology seller mdf commerce inc. MDF-T agreed to a buyout by New York private-equity giant Kohlberg Kravis Roberts & Co. LP.
The Montreal-based subscription software company said early Monday KKR would pay $5.80 in cash per share, 58 per cent higher than its previous closing price. The deal values mdf at $255-million. The stock jumped on the news. It closed Tuesday at $5.68 a share.
Like many tech companies, mdf’s stock sold off sharply after spiking during the pandemic and was gradually recovering. Meanwhile, private capital firms, flush with cash, have been eager to deploy their resources to buy solid companies at more reasonable prices than levels seen in 2020 and 2021.
The deal follows a slew of privatizations of TSX-listed tech companies that saw six of the 20 companies in the sector that went public in the first two years of the pandemic subsequently agree to takeovers: BBTV Holdings Inc., Dialogue Health Technologies Inc., Farmers Edge Inc., Magnet Forensics Inc., MindBeacon Holdings Inc. and Q4 Inc.
A seventh, automotive marketplace provider E Inc., delisted from the TSX. Vancouver’s Absolute Software Corp., which like mdf had gone public in 2000, also agreed last year to a takeover, selling to Crosspoint Capital Partners for US$870-million after years of weak stock performance.
Mdf said its board unanimously supports the deal, which came after a strategic-review process and was supported by two fairness opinions provided by Bank of Nova Scotia, which was the company’s financial adviser, and Desjardins Capital Markets. The deal is also supported by its investor, Long Path Partners.
“We are excited to strategically partner with KKR to accelerate our expansion and scale our industry-leading platform even further,” mdf chief executive officer Luc Filiatreault said in a release.
Sean Silcoff