What happened
Absolute Software (ABST) will soon cease to be publicly traded in its current form, and investors reacted very happily to the news today. The Canadian company's stock blasted almost 33% higher as a result, in very sharp contrast to the 0.2% slump of the S&P 500 index on Thursday.
So what
Absolute is being acquired by investment firm Crosspoint Capital Partners, which is buying the cybersecurity specialist for $11.50 per common share. The transaction will be effected in cash, and the deal is valued at $870 million, inclusive of Absolute's debt.
Not coincidentally, investors traded up the stock to nearly that $11.50 level just after the buyout was announced.
Crosspoint is an active and eager investor in cybersecurity businesses. It said that in acquiring Absolute, it "brings significant cybersecurity expertise that will help drive the company's next phase of growth."
The deal is subject to approval by a majority of Absolute's shareholders -- which, given the more than 30% premium, seems very likely to happen. It also requires the approval of the relevant regulatory bodies.
Assuming the acquisition is approved and finalized, Absolute will no longer be listed on any stock market, including its current U.S. home, the Nasdaq.
Now what
Interestingly, news of the Absolute buyout came just days before the company was slated to announce its results for the third quarter of fiscal 2023. According to the press release detailing the acquisition, that event will still take place -- next Monday, May 15.
Absolute said that it will pay its previously declared quarterly dividend of $0.06 ($0.08 in Canadian currency). This will be handed out on May 24 to investors of record as of May 11. Following that, dividend payments will be suspended, as per the company's agreement with Crosspoint.
