ELMO Software's major shareholders JLAB Investments and the Garber Family Trust with 13.7% and 9.7% stakes respectively in the company, have confirmed their intention to vote in favour of the takeover offer from the Los Angeles-based private investment firm

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ELMO Software agrees to takeover proposal from K1 Investment Management. (Credit: Pete Linforth from Pixabay)

Australia-based ELMO Software has agreed to be acquired by software-focused investment company K1 Investment Management in a deal worth A$486m ($319m).

In this connection, the cloud-based human capital management solutions provider has entered into a scheme implementation deed (SID) with Manhattan Bondi HoldCo, a fully-owned subsidiary of funds advised by K1 Investment Management.

As per the terms of the SID, shareholders of the publicly-listed cloud-based software solutions firm will be paid A$4.85 ($3.14) in cash per share by the Los Angeles-based private investment firm.

K1 Investment Management’s takeover offer represents a 100.4% premium to the last trading price of ELMO Software on 12 October 2022.

The SID was unanimously recommended to shareholders by the company’s independent board committee following a review process that found the scheme to be in their best interests.

ELMO Software chairman Barry Lewin said: “The ELMO Independent Board Committee has carefully considered the proposal and believes the offer price of $4.85 cash per share represents compelling value for ELMO shareholders.

“Whilst ELMO has achieved considerable success to date in Australia/New Zealand and the United Kingdom, the IBC has balanced this against the macroeconomic and execution risks in achieving future plans and has unanimously concluded that the Scheme is a compelling option which realises attractive value for our shareholders.”

Elmo Software’s CEO and co-founder Danny Lessem, who owns 11% of the company’s stock, will roll about 70% of his shares owned or controlled into the bid vehicle.

The company’s major shareholders JLAB Investments (No. 2) and the Garber Family Trust with 13.7% and 9.7% stakes, respectively, have confirmed their intention to vote in favour of the SID.

The SID, which is subject to approval from the Australian Foreign Investment Review Board (FIRB) and other customary conditions, is expected to close in Q1 2023.