(Reuters) -Dye & Durham Ltd, a Canadian cloud-based software maker, has received a buyout offer from a management-led shareholder group worth about C$3.4 billion ($2.8 billion), less than a year after its flotation on the Toronto Stock Exchange.
The offer to take Dye & Durham private for C$50.5 per share represents a premium of roughly 23% to its closing price of C$40.99 on Friday, and is some seven times more than the price of C$7.50 set in last year's initial public offering.
Shares of the company closed up 17.7% at C$48.24 on Monday.
Dye & Durham said in a statement that a newly formed special committee of independent directors would explore and evaluate potential strategic alternatives, including a merger, the sale of the company or its parts, and the sale of some of its assets, among other options.
It did not say how the offer was being financed and who among its management and shareholders were supporting it. The company declined to comment further.
Asset manager Mawer Investment Management, whose clients hold about 9% of the outstanding Dye & Durham shares, said the offer price was too low.
"Our position is either there needs to be a higher offer that, in our opinion, is meaningfully higher or our position is that the best interest of the company is to be public," Jeff Mo, portfolio manager at Mawer, told Reuters.
Led by chief executive Matthew Proud, Dye & Durham makes technology products for legal and business professionals, providing them access to government registry data, and simplifying the document search process, its website shows. It has operations in Canada, the United Kingdom, Ireland and Australia.
It acquired https://www.newswire.ca/news-releases/dye-amp-durham-acquires-future-climate-info-for-94-million-850233386.html Future Climate Info Ltd, a UK-based company that provides legal professionals with environmental reports meant to aid in property transactions, for about C$94 million earlier this month.
The company also acquired https://www.newswire.ca/news-releases/cloud-based-terrafirma-acquired-by-dye-amp-durham-for-20-million-868523833.html UK property technology business Terrafirma IDC Ltd for about C$20 million earlier this month.
It said it has access to more than C$1.0 billion in capital which it plans to deploy on accretive acquisitions.
Dye & Durham said it expects C$220 million in annualized pro forma earnings before interest, taxes, depreciation and amortization following recent acquisitions and reflecting its business performance.
Last year, Proud and his brother, Tyler Proud, executive chairman of technology firm Avesdo Inc, led a failed C$58 million bid for Torstar Corp, the publisher of the Toronto Star.
($1 = 1.2072 Canadian dollars)
(Reporting by Sohini Podder in BengaluruEditing by David Holmes and Rosalba O'Brien)