Managed services provider and software developer Citadel Group will be acquired by Pacific Equity Partners (PEP) for more than $500 million.

The Australian private equity firm proposed to wholly acquire the company for $5.70 per share, or a 43 percent premium over the current share price of $3.98.

Citadel’s board unanimously recommended that shareholders vote in favour of the proposal in the absence of a superior one.

Citadel board chair Peter Leahy said, “The [PEP acquisition bid] is an attractive transaction which provides an all-cash option for Citadel 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.”

Shareholders also have the option to take a scrip alternative to enable them to retain an indirect interest in the business. They can choose either all-cash, all-scrip or a combination of the two.

Citadel expects the acquisition will finalise in December 2020, subject to some conditions satisfied.

Source: CRN

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