The Citadel Group has inked an acquisition agreement with Pacific Equity Partners (PEP)-owned Pacific Group Bidco worth $503 million after receiving an unsolicited approach.
Pacific Equity Partners is a Sydney-founded private equity investment firm that focuses on leveraged buyout and growth capital transactions, primarily in Australia and New Zealand. The firm has approximately $4.9 billion in assets under management and claims to be the largest private markets fund manager in Australasia, as measured by FUA.
Under the terms of the unsolicited approach, PEP would acquire 100 per cent of the equity interests of Citadel for $5.70 per share in cash, reduced to the extent of any special dividend — represents a premium of 43.2 per cent to the last closing price, the publicly-listed IT services company told shareholders.
The proposal values Citadel’s equity at $448.6 million and its enterprise value at $503.1 million.
Citadel’s board has unanimously recommended that the Canberra-based company’s shareholders vote in favour of the scheme of implementation deed in the absence of a superior proposal and subject to the independent expert concluding that the scheme is in the best interests of Citadel shareholders.
“The scheme is an attractive transaction which provides an all-cash option for Citadel shareholders,” Citadel Group chairman Peter Leahy said in a statement to shareholders. “The Citadel board has unanimously concluded that the scheme represents a compelling outcome for our shareholders, customers, suppliers, and staff.
“The price is a very tangible measure of the value and quality of Citadel’s industry leading expertise in specialist software and critical secure information management in complex environments like healthcare, defence and national security, government and tertiary education. At a significant premium to the current trading price, PEP’s offer provides Citadel shareholders with certainty of value and the opportunity to realise their investment in full for cash.
“Citadel’s customers will benefit from access to a broader product suite and service capability given Citadel’s ability to invest more in growth markets and sectors, and further develop its industry-leading software solutions, with PEP’s backing. In addition, the scheme is positive news for Citadel staff, as we believe there will be increased opportunities to develop new technologies with new partners and advance and grow their careers,” he added.
The scheme is subject to certain conditions which must be satisfied before it can be implemented, including shareholder and court approval. If approval is granted, the acquisition could be implemented by mid- to late-December this year.
Just days ago, the Citadel Group made a move to expand its health business by acquiring Australian risk software vendor eQstats.
That deal will see the Canberra-based IT services company integrate the eQstats’ health software and services into Citadel Health in Australia and Wellbeing Software in the UK.
Based in Sydney, eQstats provides automated reporting, integrated data, data measurement and data compliance tools to large organisations to help their compliance.
“These offerings enable clients to optimise, integrate and innovate across their health operations,” the company said at the time.