Takeover speculation surrounds mobile donations company Pushpay Holdings. File image. Photo: Jae Park/ Unsplash
Mobile donations company Pushpay Holdings has agreed to a billion dollar takeover deal from two of its big shareholders.
After months of speculation and on again-off again talks the company said it had agreed to the offer from Australian private equity firm BGH Capital and US investment concern Sixth Street, which own a combined 20 percent.
The offer is at $1.34 a Pushpay share, a 12.6 per cent premium to its last price before it was put in a trading halt earlier on Friday.
"The board unanimously recommends that shareholders vote in favour of the scheme ... in the absence of a superior proposal," Pushpay said in a statement after the close of the New Zealand stock exchange.
It said it had done a comprehensive review of the various expressions of interest and checked other potentially interested parties.
Pushpay chairperson Graham Shaw said they had looked at the bid in the context of the company's future growth plans and whether that could be achieved as a listed company.
"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," Shaw said.
The offer valued Pushpay at $1.54b, with an implied enterprise value of $1.6b based on nearly 17 times the company's underlying earnings forecast.
The company has developed software used by churches for collecting donations in the US where it derives its revenue.
It gave a trading update to coincide with the takeover news, saying first half revenue was up 10 per cent to US$103m, but underlying earnings down 10 per cent on a year ago because of higher costs.
The slower growth prompted Pushpay to lower its full year earnings forecast to between US$54m-58m from the previous US$56m-61m.
The company has been subject of takeover talk since late April when it revealed unsolicited offers had been made.
The deal will need the approval of shareholders and regulators, but the directors have undertaken to support and promote it.
Pushpay is also at the centre of a criminal court case brought by the Financial Markets Authority over the alleged insider trading of its shares.