Volaris makes an offer to acquire Adapt IT
Canadian software group Volaris has made a cash offer to acquire technology company, Adapt IT.
Volaris plans to buy more than 50 percent of the issued ordinary shares of Adapt IT for a cash consideration of 650 cents per share. The cash consideration is 56.9 percent higher than the 30-day volume weighted average traded price of Adapt IT securities on the JSE, which was 414 cents on 26 January 2021, the last trading day before Huge Group Limited revealed its general offer to Adapt IT shareholders.
Volaris, a Canadian software firm, will make the deal. Volaris is a subsidiary of Constellation Software Inc., a publicly traded company in Toronto.
The offer will be made through a scheme of arrangement to be suggested by Adapt IT to their shareholders. If the scheme is not proposed or fails, Volaris will make a general offer to the Adapt IT shareholders to acquire at least 50 percent of Adapt IT shares. If the scheme is applied, Adapt IT shareholders will have the option to retain all or part of their Adapt IT shares and remain invested in Adapt IT as a delisted company.
Binding undertakings have been given to Volaris to vote in favour of the scheme and the delisting resolution by shareholders holding 21.6 percent of Adapt IT shares barring treasury shares. Volaris has produced a bank guarantee for the maximum possible purchase consideration to the Takeover Regulation Panel.
The Volaris bid is a better deal than Huge Group’s unsolicited all-share offer of 27 January 2021, where Huge Group offered to buy up to all of Adapt IT's distributed shares. In Huge Group’s proposal to Adapt IT, it offered 0.9 Huge Group shares for each Adapt IT ordinary share.
This offer is subject to all the applicable regulatory approvals, including the conditions outlining the details of the offer.
Constellation Software, the parent company of Volaris, was founded in 1995 in Toronto, Canada, and is an international supplier of industry-leading vertical market software and services to a variety of industries in both the public and private sectors. Its goal is to buy, manage, and grow market-leading tech companies that specialise in developing specialised software solutions.
Adapt IT is a provider of leading specialised software and digitally-led business solutions that assist clients across targeted industries to achieve more by improving their customer experience, core business operations, business administration and public service delivery.
Following the Huge Group bid, Adapt IT formed an independent board to assess the Huge Group offer, as well as any subsequent offers obtained by Adapt IT shareholders, with the help of independent advisors. As a result, the Volaris bid is being evaluated by the independent board.
“The independent board of Adapt IT has taken note of Volaris’s firm intention to make an offer. Further details of the offer from Volaris will be included in a circular to shareholders which will contain terms of the scheme of arrangement and general offer together with the independent board’s opinion and recommendation,” said Adapt IT’s independent non-executive chairman, Craig Chambers.
Adapt IT shareholders have been advised to not make any decisions or take any action until the independent board of Adapt IT has provided shareholders with its response on the Huge Group offer.