Shares of Atrium Innovations (TSE:ATB) spiked to their highest level in six years after Permira funds agreed to buy the company for $24 per share.
Permira, a European private equity firm, will become the majority owner of the natural supplement manufacturer with the cash purchase of three-quarters of all outstanding shares, while two Quebec pension funds, Fonds de solidarité and Caisse de dépôt et placement du Québec, will split the remaining stake. Including the assumption of debt, the transaction values Atrium at $1.1 billion.
The offer is a 27% premium to the 30-day volume weighted average price and a 23% premium on Thursday's close.
Atrium said it will maintain its head office in Québec and complete the expansion of its manufacturing facility in the province. No jobs will be lost as a result of the transaction.
The company's board has recommended that shareholders accept the offer.
“Atrium intends to continue to pursue its growth strategy both organically and through acquisitions. The Permira funds’, the Fonds’ and CDPQ’s resources provide us the ability to accelerate our growth with the financial ability to expand globally," said Atrium president and chief executive officer Pierre Fitzgibbon in a statement.
According to terms of the agreement, Atrium has a 45-day period, beginning today, during which it can solicit other deals which, if materialize, Permira will have the right to match even after the go-shop period elapses. If Atrium agrees to another proposal during the go-shop period, it will have to pay Permira $13.5 million. The break fee rises to $23.1 million under undisclosed circumstances.
Prior to the announcement of this transaction, Atrium's market value had grown two-thirds this year.