https://www.theglobeandmail.com/business/article-dye-durham-raises-600-million-to-help-fund-acquisition-spree/
The Toronto-based company will raise $200-million in equity, offering 3.96 million shares at a price of $50.50. One third of that equity will be sold to major existing shareholders. The company will also raise $300-million in debt, which is convertible to equity, and is due March 1, 2026. The offering is expected to close on Feb. 23.
D&D has made four acquisitions in the past three months, spending more than $750-million combined. It entered the Australian market with its purchases of SAI Global’s property division for $87-million and GlobalX for $166-million. In Ontario, it bought a majority stake in Courthouse Solutions Inc. for an undisclosed sum, and acquired DoProcess for $530-million. The DoProcess acquisition caused an uproar among Ontario real estate lawyers last month after D&D announced a 400-per-cent price hike on a DoProcess service called The Conveyancer.
D&D’s strategy is to buy companies that provide software services to law firms, which have few competitors and high costs for customers to switch services, and then raise prices that the firms then pass on to clients. Passing on fees “reduces the likelihood that customers seek out new vendors once the solutions have been implemented, regardless of cost,” the company stated in its prospectus last year.
The company generated $17.1-million in adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for the three months ended Dec. 31, 2020, a 96-per-cent increase from the same period in 2019. It spent $630-million on acquisitions in the last three months of 2020.
D&D made its debut on the TSX last July in a $150-million IPO that was 13 times oversubscribed. The stock was trading at $49.19 on Tuesday afternoon, down 6.5 per cent.