(Bloomberg) -- Dye & Durham Ltd., a Canadian legal software company that’s been under pressure from activist investors, is exploring a sale after receiving takeover interest.
The Toronto-based company is working with advisers on a strategic review that may include a sale, merger or other transactions, it said in a statement Tuesday, confirming an earlier report from Bloomberg News. There’s no guarantee it will get a deal, the company cautioned.
Dye & Durham is working with Goldman Sachs to field interest from suitors, which include US-based private equity firms and some strategic companies, according to a person familiar with the matter, asking not to be identified because the discussions are confidential.
Dye & Durham shares surged as much as 11.1% after the Bloomberg report on the company’s process, reaching C$18.78 in Toronto, the highest intraday level in more than a year. The shares closed at C$18.50, up 9.5% from the previous day.
Dye & Durham, which provides software and services to the legal and banking sectors, went on an acquisition spree after an initial public offering in 2020. But it has been forced to reconsider its growth strategy because of concerns about high leverage. The company had long-term debt of more than C$1.5 billion ($1.1 billion) as of June 30.
Representatives for the company declined to comment.
The shares, which briefly traded above C$50 in 2021, closed Monday at C$16.90, giving the company a market value of C$1.13 billion. Revenue in the fiscal year ended June 30 totaled C$457.7 million.
Last year, the firm hired Goldman Sachs Group Inc. and Canaccord Genuity Group Inc. to advise it on a potential sale of noncore assets, including its financial services division.
Earlier this month, the company agreed to give a board seat to Blacksheep Fund Management Ltd., one of its largest shareholders, as it tries to fend off a campaign by activist investors.
Engine Capital LP, which says it owns about 7.1% of Dye & Durham’s shares, said last week it’s still planning to pursue boardroom changes and will introduce its own slate of director candidates for the annual meeting.
(Updates with company statement and closing share price in the first four paragraphs.)
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