Canada pension fund, U.S. buyout firms eye DH Corp

Fri Jan 27, 2017 2:18pm EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By John Tilak and Matt Scuffham

TORONTO (Reuters) - Canada Pension Plan Investment Board and several U.S. private equity firms are interested in acquiring Canadian financial technology services provider DH Corp DH.TO, according to people familiar with the situation.

TPG, Cerberus Capital Management LP and technology-focused Thoma Bravo are some of the U.S. buyout firms looking at DH, the people said on condition of anonymity because the matter is confidential.

The moves come more than a month after DH appointed a special committee as it received expressions of interest. The company hired Credit Suisse and Royal Bank of Canada as financial advisers. It said at the time that it had received no formal offers.

Shares in DH rose by as much as 6.8 percent in afternoon trading, having been up 2.2 percent prior to the Reuters report on interest from CPPIB and U.S. firms. The shares were up 3.7 percent to C$23.2 at 1330 ET, valuing the business at C$2.48 billion.

The interest in DH came at a point when its shares were in a slump, dropping to a record low last November. Its shares have since risen by more than 60 percent in anticipation of a deal materializing, but are still trading at just over half the record high they hit in July 2015.

TPG, CPPIB and Cerberus declined to comment. DH and Thoma Bravo did not immediately respond to requests for comment.

CPPIB, Canada's biggest public pension fund, is directly investing in companies as it looks to diversify capital away from public equity and fixed income markets.

Canada's major financial institutions are investing heavily in financial technology, or fintech, companies in the expectation that new innovations will transform the financial services industry in decades to come. Fintech investments by private equity firms has also surged in recent years.   Continued...