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Vector Capital offer for Halogen Software is fair, says Canaccord Genuity

Halogen Software
Halogen Software
Halogen Software CEO Les Rechan.

The Vector Capital offer for Halogen Software (Halogen Software Stock Quote, Chart, News: TSX:HGN) is a good one and will not likely be bested, says Canaccord Genuity analyst Robert Young.

This morning, Halogen Software announced it had entered into a definitive agreement to be acquired by Saba Software, a portfolio company of Vector Capital, for a total value of of approximately $293-million, or $12.50 a share.

“The transaction provides compelling and certain value, an attractive premium and liquidity to our shareholders, after a comprehensive strategic alternatives review process,” said Rob Ashe, the chairman of Halogen’s recently formed special committee. “Teaming up with Saba also strengthens and accelerates Halogen’s future growth prospects; these are two pioneers in learning and performance, who share a strong vision for the future of talent management.”

Young says he sees it as unlikely that a better bid for Halogen will emerge. He explained why.

Tribe

“We believe this is a good outcome for investors as shares have not been at this level since early 2014, and represents a 9% premium to its IPO price of C$11.50. We see no obvious regulatory risks and believe the probability of a premium competing bid is low, ” said the analyst, adding: “Despite our longer-term positive outlook on Halogen Software, the company has faced competition and churn hurdles leaving it in the midst of a transition year in 2017. While we believe that Halogen has a strong, organic product focused on the mid-market, we do not see it as a unique product demanding a premium multiple.”

In a research update to clients today, Young maintained his “Hold” rating, but raised his one-year price target on the stock from $10.00 to $12.50.

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

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