martinwolf
Transaction Analysis
Pivot Technology Solutions Proposes Share Exchange
Financial Information*
- Enterprise Value $357.4M CAD
- EV/LTM Revenue 0.25x
- EV/LTM EBITDA 15.1x
Transaction Facts
- Pivot Technology Solutions (TSX:PTG.V) announced today a proposed share exchange transaction with PTS Holdings Corporation and PTS Income Corp. The company is a portfolio of three technology solutions and services providers: ACS, Sigma, and ProSys (a certified woman-owned business).
- PTS Holdings Corporation constitutes a group of investors including two of Pivot's founders (the "Founder Group"). It is joined in the transaction by PTS Income Corp, a special purpose corporation that will receive cash distributions.
- The transaction involves an exchange of Pivot Common Shares, valued at $0.53 CAD at the close of Jan. 25, for Preferred Securities with a face value equivalent of $0.70 CAD. Quarterly distributions on the Preferred Securities represent an annual yield of 12.85 percent of face value, a three-fold increase on the current rate of Common Share dividends.
A Big Month for Pivot
- High Volume, Low Confidence: Following a brief trading halt, volume
for PTG closed the day at 2.5 million shares traded - more than 8x the stock's 3-month average volume. However, even with the strong volume, the stock closed the day at $0.55 CAD - well below the proposed $0.70 CAD of the exchange.
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 Changes Afoot: This announcement follows the Jan. 12 promotion of Kevin Shank to President. He replaced the well-respected Warren Barnes, who had been CEO since July 2013 and will be pursuing other executive opportunities after a brief transitional period. Pivot Chairman John Sculley is voting for the transaction, exchanging his holdings of Pivot Common Shares for Preferred Securities. As such, he will no longer be involved with Pivot in an official role.
- Looking Forward: While on the conference call discussing this announcement Pivot executives stated that there were no acquisitions or other strategic plans in the works, they noted that this structure could be used as a financing vehicle for future transactions.
For more information about this transaction
, click here to read the press release.
martinwolf was not the advisor in this transaction.
*Note: Enterprise value was calculated by applying the share exchange premium over Pivot's Jan. 26 closing price to outstanding shares and adding it to Pivot's enterprise value as listed on Yahoo! Finance. Multiples were determined using LTM figures as of Sept. 30, 2015. All figures are in CAD.
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With offices in the San Francisco Bay Area, martinwolf is a leading M&A Advisory focused on middle market companies in the IT Services, IT Supply Chain, IT-Enabled Business Process Outsourcing and Software as a Service (SaaS) space. Since 1997, our team has completed more than 140 transactions in nineteen countries and sold seven divisions of Fortune 500 companies. The firm is also a presenting sponsor of the Global IT M&A Forum. martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com. To learn more about martinwolf, contact Matthew Putzulu at [email protected]. © martinwolf 2016 |
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