MONTREAL—Montreal’s 20-20 Technologies Inc.’s board backs a $77-million takeover offer from a U.S. private equity firm, a deal it selected after talking to more than 50 interested parties.
The maker of design and manufacturing software for the furniture industry has inked a definitive agreement with an affiliate controlled by Vector Capital Corp.—a firm focused on the technology sector—for $4 per share, a 28 per cent premium over the company’s closing share price.
Jocelyn Proteau, chairman of a special committee that oversaw a strategic review said the process attracted more than 50 potential purchasers from Canada, the U.S. and Europe.
Amish Mehta, a partner at Vector, said 20-20 has all the characteristics the investment firm considers when acquiring a company.
“Using 20-20 as a platform investment, we intend to continue investing in innovative solutions for interior design and furniture customers and expand 20-20’s presence in new markets organically and through acquisitions while maintaining a strong presence in Quebec, where the technology was developed,” Mehta said.
All of the directors, senior officers and major shareholders have made agreements with Vector to vote in favour of its offer.
Jean Mignault, founder and executive chairman of 20-20’s board has agreed to sell his stake in the company to Vector. He will continue on as a board member and as chief of strategic direction.
“Our vision from the outset has always been to build a software platform even more firmly establishing 20-20 Technologies as the worldwide leader in our vertical industry. Vector shares our vision for the future and therefore we strongly support the proposed transaction,” he said.
The deal is subject to approval from two-thirds of votes cast by shareholders at a special meeting set for September.
The deal provides for a termination fee of $3 million and expense reimbursement of $720,000 to Vector if 20-20 ends the deal and a $4.5 million fee paid to 20-20 if Vector ends the deal.
20-20 Technologies provides computer-aided design, business and manufacturing software for the interior design and furniture industries. It operates in 11 countries with more than 500 employees.