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Add Montreal-based 20-20 Technologies Inc. (TWT-T) to the list of Canadian hi-tech companies being bought up by foreign investors.
An affiliate of U.S. private equity firm Vector Capital Corp. has agreed to acquire 20-20, the world’s top provider of computer-assisted design, business and manufacturing software for the interior design and furniture industries, in a deal that won unanimous approval from 20-20’s board.
The transaction is valued at about $77 million or $4 cash per share, representing a 28-percent premium over the closing share price of $3.12 on April 3, the last trading day before 20-20’s strategic review process was publicly announced. The purchase price represents a 33-percent premium over the average closing stock price in the 90 days prior to April 3.
20-20 president and chief executive Jean-François Grou said the best-suited buyer was found after an exhausting sales process that included pitches to U.S., European and Canadian firms.
“We went out of our way to make sure everybody was contacted,” he said in an interview Monday.
Canadian hi-tech insiders have bemoaned the lack of a mature financing system in this country that could ensure budding hi-tech companies like 20-20 stay here and continue to grow into larger, more globally-oriented firms.
20-20 was also the target of a U.S. activist investor a year-and-a-half ago, but Grou played down its role in pushing the company to being sold.
Eric Rosenfeld of Crescendo Partners in New York fought for a new slate of directors in 2010 but did not win its battle.
Ronsenfeld said in an interview that Crescendo “played a role in the outcome.”
Crescendo is still assessing the Vector Capital offer, he said.
The board has recommended shareholders vote for the deal.
A special shareholders’ meeting is planned for September.