The Pushpay Holdings Ltd (ASX: PPH) share price has returned from its trading halt with a bang.
In morning trade, the donation technology company's shares are up 9% to $1.15.
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Why is the Pushpay share price storming higher?
The catalyst for the rise in the Pushpay share price on Monday has been news that the company has accepted a takeover offer from the Sixth Street and BGH Capital Consortium.
Sixth Street is a global investment firm and BGH Capital is an Australia and New Zealand-focused private equity firm. Together, the two parties currently hold, in aggregate, 20.34% of the shares in Pushpay.
According to the release, Pushpay has entered into a scheme implementation agreement under which the consortium will acquire all of Pushpay's shares at a price of NZ$1.34 (A$1.21) per share in cash via a scheme of arrangement. This represents a 14.7% premium to the Pushpay share price prior to its trading halt.
Why did Pushpay accept this offer?
The release notes that following a comprehensive process and a thorough consideration of strategic options, the Pushpay board believes the offer provides "compelling value for shareholders."
It highlights that while it is only a 14.7% premium to the last close price, it is a 30.1% premium to undisturbed share price on 22 April before takeover offers were first received. In addition, since then, the ASX All Technology index has declined 12.1%.
It implies an equity value of US$898 million and an acquisition multiple of 16x the midpoint of its revised EBITDAF guidance of US$56 million for FY 2023.
Pushpay's Chair, Graham Shaw, commented:
In considering the options, including the possibility of continuing to implement the Company's growth strategy as a publicly listed company, the Board adopted a long-term view of the risks and rewards of various alternatives.
After a thorough assessment, the Board believes that the Sixth Street / BGH Consortium Scheme proposal currently represents the most compelling value for shareholders. Although the Board remains confident in the future of Pushpay, the transaction will accelerate a capital return to shareholders and mitigates the risks that would otherwise be involved in delivering the opportunities from executing Pushpay's strategic plan over time. Accordingly, the Board is pleased to unanimously recommend the transaction to shareholders.
