Plantro offers $384 million to buy Dye & Durham
Plantro Ltd. , the investment firm controlled by former Dye & Durham Ltd. executive Matt Proud , has submitted a fresh proposal to take the legal software company private for about $384 million , according to people familiar with the matter.
The offer was sent to Dye & Durham’s special committee this week and proposes to pay $5.72 a share in cash and notes, according to the people, more than double the stock’s closing price on Thursday.
The stock was halted at the open in Toronto on Friday, and rose as much as 33 per cent after it resumed trading before paring some of those gains.
Before Friday, Dye & Durham’s shares had dropped 85 per cent this year, giving the company a stock market value of just $182 million. That’s largely because it’s burdened with some $1.6 billion in debt and faces a potential default due to late financial disclosures.
A representative for Dye and Durham declined to comment, though the company confirmed Friday morning that it received a proposal . A spokesperson for Plantro didn’t respond to a request for comment.
Tumultuous Year
The proposal lands after a year of upheaval at Toronto-based Dye & Durham, which provides technology for law firms to help them manage their practices, handle legal accounting and perform other tasks.
Proud, the company’s longtime chief executive officer, departed late last year after losing a proxy fight to activist investor Engine Capital. But soon after, he was trying to come back.
In February, Proud and Plantro floated a $20-a-share offer worth about $1.3 billion. Although that didn’t go anywhere, he continued to agitate for the company to go private.
In July, Dye & Durham launched a strategic review after reaching a truce with Proud and Plantro that paused a heated governance dispute. The review is examining options including a sale, breakup, recapitalization or merger.
The fragile peace between the board and Proud collapsed by October. Canadian Imperial Bank of Commerce, adviser to the special committee, withdrew from the mandate, and Dye & Durham filed a legal action accusing Proud and Plantro of violating the July cooperation agreement and undermining the review with “misleading statements” about its finances.
This week brought more governance shake-ups. The company named veteran dealmaker Alan Hibben as independent chair and added chief executive George Tsivin to the board, according to a statement Thursday. Three directors resigned, including Engine Capital’s Arnaud Ajdler. The changes come as Dye & Durham prepares for a Dec. 31 annual meeting and looks to repair its deteriorating financials.
In a separate move Friday, OneMove Capital Ltd., a company led by Proud’s brother, Tyler Proud, nominated five directors of its own to the board. Tyler Proud, who co-founded Dye & Durham, cited “poor leadership” from directors installed by Engine as the reason in a statement.
“Yesterday’s attempt by former Chairman Arnaud Ajdler to hand-pick his own replacement is consistent with the same approach that created the problem,” he said.
OneMove’s nominees are Tyler Proud, Edward Smith, David Giannetto, Allen Taylor and ex-Dye & Durham director and Chief Financial Officer Ronnie Wahi.
As for Plantro’s takeover offer, the company told Dye & Durham’s board it’s prepared to sign a binding agreement immediately with no additional due diligence, according to the people.
Under the proposal, shareholders would receive $3.50 in cash at closing, with the remaining $2.22 paid in new senior unsecured notes yielding 15 per cent — though only a third of that interest would be payable in cash, the people said. Plantro also offered a go-shop period, allowing the board to sign a deal quickly while continuing to solicit higher offers. The stock was trading at $3.19 at 11:22 a.m. Friday.
—With assistance from Melissa Shin and David Scanlan.