Dye & Durham Announces that Following Indication of Interest from Management to Acquire the Company it is Commencing Strategic Process
TORONTO, May 31, 2021 /CNW/ - Dye & Durham Limited ("Dye & Durham" or the "Company") (TSX: DND) announced today that, following an indication of interest from a shareholder group led by management to acquire the Company, its board of directors has commenced a process to explore and evaluate potential strategic alternatives focused on maximizing shareholder value. The indication of interest would result in Dye & Durham being taken private at an approximate 23% premium to the current market value, being a per share value of $50.50.
The strategic process will be led by a newly formed special committee of independent directors, and is fully supported by the Company's management team. The alternatives to be explored in connection with the strategic process could include, among other things, the sale of part or all of the Company, a sale of some of the assets of the Company, a merger or other business combination with another party, or other strategic transactions.
The Company has not made any decisions related to any specific strategic alternatives at this time and there can be no assurance that the exploration of strategic alternatives will result in a transaction. It is the Company's current intention not to disclose developments with respect to the strategic process unless and until the board of directors has approved a specific transaction, on the recommendation of the special committee, or otherwise determines that disclosure is necessary or appropriate.
Corporate Update
As a result of its recent acquisitions and business performance, the Company has updated its prior financial guidance and has disclosed that it expects pro forma annualized Adjusted EBITDA1 of approximately $220.0 million. This does not take into account expected synergies from the Company's recent acquisitions.
This financial guidance is being provided to enhance visibility into the Company's expectations for financial targets. Please refer to the section regarding forward-looking statements which forms an integral part of this release.
1 Adjusted EBITDA is a non-IFRS measure. Please see the Non-IFRS Financial Measures section of this press release for more information. Pro forma annualized Adjusted EBITDA is based on (a) current quarter forecasted Adjusted EBITDA of Dye & Durham; and (b) full quarter forecasted adjusted EBITDA of (i) the recent acquisitions of Future Climate Info Limited, Terrafirma IDC Ltd., and certain other businesses acquired during the current quarter, and (ii) GlobalX Information Pty Ltd., which is expected to close in June 2021, on an annualized basis.
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 provides critical information services and workflows, which clients use to manage their process, information and regulatory requirements. The Company has operations in Canada, the United Kingdom, Ireland and Australia, 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.
Non-IFRS Financial Measures
Adjusted EBITDA is not defined by and does not have a standardized meaning under International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. This non-IFRS financial performance measure is defined below. Non-IFRS financial measures are used by management to assess the financial and operational performance of the Company. The Company believes that this non-IFRS financial measure, in addition to conventional measures prepared in accordance with IFRS, enables investors to evaluate the Company's operating results, underlying performance and prospects in a similar manner to the Company's management. As there are no standardized methods of calculating these non-IFRS measures, the Company's approaches may differ from those used by others, and accordingly, the use of these measures may not be directly comparable. Accordingly, this non-IFRS measure is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
"EBITDA" means net income (loss) before amortization and depreciation expenses, finance and interest costs, and provision for income taxes.
"Adjusted EBITDA" adjusts EBITDA for stock-based compensation expense, asset impairment charges, loss on settlement of loans and borrowings, gains or losses from changes in fair value of derivative financial instruments and contingent consideration liabilities measured at fair value through profit or loss, specific transaction related expenses related to acquisitions, the Company's initial public offering and capital structure reorganization, operational restructuring costs, restructuring costs includes impact to the full year of cost synergies related to the reduction of employees in relation to acquisitions.
Please refer to the Company's most recent management discussion and analysis for further information on non-IFRS measures.
Forward-looking Statements
This press release may contain forward-looking information within the meaning of applicable securities laws, which reflects the Company's current expectations regarding future events, including with respect to the Company being acquired or effecting a strategic transaction, management engaging with the board of directors to acquire the Company, and its financial outlook. In some cases, but not necessarily in all cases, forward-looking statements can be identified by the use of forward looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking statements. Forward-looking statements are not historical facts, nor guarantees or assurances of future performance but instead represent management's current beliefs, expectations, estimates and projections regarding future events and operating performance.
Specifically, Dye & Durham's forecast on pro forma annualized Adjusted EBITDA is considered forward-looking information. The foregoing demonstrates Dye & Durham's objectives, which are not forecasts or estimates of its financial position, but are based on the implementation of its strategic goals, growth prospects and growth initiatives. Management's assessments of, and outlook for, pro forma annualized Adjusted EBITDA set out herein are generally based on the following assumptions: (a) Dye & Durham's results of operations will continue as expected, (b) the Company will continue effectively execute against its key strategic growth priorities, (c) the Company will continue to retain and grow its existing customer base and market share, (d) the Company will be able to take advantage of future prospects and opportunities, and continue to realize on synergies, (e) there will be no changes in legislative or regulatory matters that negatively impact Dye & Durham's business, (f) current tax laws will remain in effect and will not be materially changed, (g) economic conditions will remain relatively stable throughout the period, (h) the industries Dye & Durham operates in will continue to grow consistent with past experience, and (i) the Company will acquire GlobalX Information Pty Ltd. The Company considers these assumptions to be reasonable in the circumstances, given the time period for such projections and targets. The achievement of target revenue set out above is subject to significant risks including, but not limited to: (a) that the Company will be unable to effectively execute against its key strategic growth priorities, (c) the acquisition of GlobalX Information Pty Ltd. not occurring within the currently expected timeline or at all, and (b) the Company will be unable to continue to retain and grow its existing customer base and market share. These estimates have been prepared by and are the responsibility of management.
Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company's control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risk Factors" in the prospectus supplement of the Company dated November 18, 2020 to the short-form base shelf prospectus (including the documents incorporate therein) of the Company dated November 18, 2020. Dye & Durham does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
SOURCE Dye & Durham Limited
Ross Marshall, LodeRock Advisors Inc., [email protected], 416.526.1563
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