Volaris gets significant backing to take over Adapt IT

The Canadian software solutions company wants to expand its presence in Africa, where it has limited reach.

Canadian software solutions acquisition company Volaris has just come out on top amid an ugly takeover battle for South Africa’s Adapt IT Holdings. Locally based software acquisitions firm Huge group was also gunning for control of Adapt IT after it made an offer to purchase 100 percent of Adapt IT shares for R800 million in a share swap deal.

The share swap deal is based on a ratio of R6.13 per share, but it faced tough competition from Volaris, which is offering R6.50 per share.

Shareholders at Dublin-based hedge fund Blacksheep Master Fund, which controls at least 44 percent of Adapt IT, have been instructed to vote in favour of Volaris’s bid. “The irrevocable undertakings from shareholders to date include an irrevocable undertaking from Blacksheep Master Fund Limited, who have confirmed their undertaking to vote in favour of the resolutions to approve the offer,” said Adapt IT.

Volaris seems to enjoy the support of Adapt IT while Huge Group does not. Huge’s aggressive takeover strategies have landed them in trouble with the Takeover Regulation Panel (TRP). Last week, the TRP ordered Huge to pull two videos off the company website, aimed at influencing Adapt IT shareholders’ decisions. The videos apparently encouraged shareholders to vote in favour of keeping Adapt IT in South Africa rather than moving it to Canada, where Volaris’s parent company, Constellation Software, is listed.