Mining software provider K2fly’s shares hiked 85 per cent today after revelations emerged that the company is set to be taken over by globally-renowned technology-focused investment firm Accel-KKR.
Under the binding scheme implementation deed signed by the two companies, K2fly shareholders will be entitled to receive 19c per share – representing a massive 90 per cent premium on the company’s previous closing price of 10c.
The news sparked a flurry of interest in K2fly on the ASX, with almost 5.5 million of its shares changing hands during today’s intraday trading and its price surging 85 per cent from its previous close of to touch a high of 18.5c.
The binding agreement has been made with Accel-KKR’s subsidiary Argyle Bidco and in a sign that that the deal was something of a meeting of the minds, K2fly directors unanimously recommended that shareholders vote in favour of the scheme. The directors hold about 19.9 per cent of the company’s issued share capital.
K2fly’s software remains the only commercial off-the-shelf software-as-a-service (SaaS) solution available globally for the mining sector to ensure proper resource compliance, technical assurance and disclosure.
Accel-KKR is a well-known investment firm that provides a broad range of capital solutions including buyout capital, minority-growth investments and credit alternatives. It also invests across a wide range of transactions that include private company recapitalisations, divisional carve-outs and going-private transactions.
K2fly chief executive officer Nic Pollock said: “In the last 5 years, K2fly has proven there is a strong demand for our industry-first Resource Governance solutions across the biggest mining companies in the world. Accel-KKR have demonstrated a unique understanding of software businesses like K2fly and demonstrated the ability to take them to the next level of maturity and growth.”
Management says K2fly’s most significant shareholders, who hold or control 48.5 per cent of the company’s voting shares, had indicated they were in favour of move.
Accel-KKR managing director Dean Jacobson said his company’s offer for K2fly was founded on the belief it could drive continued innovation and value for customers and unlock new growth opportunities for the business.
Back in April, K2fly recorded its 15th-straight quarter of annual recurring revenue (ARR) growth, which it says has been driven by contract renewals with two major clients. According to its March quarterly report, the company delivered an ARR of $8.3 million in the first three months of the calendar year, representing a 19 per cent increase when compared to the previous corresponding period.
K2fly’s list of clients features a host of major movers and shakers in the mining and resources industry including Rio Tinto, BHP, Fortescue Metals Group, South 32 and Anglo American.
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By Michael Philipps
