Montréal-based e-commerce solutions company MDF Commerce is going private after entering a definitive agreement that will see it acquired by New York-based investment firm Kohlberg Kravis Roberts (KKR).
The all-cash transaction will see MDF shareholders receive $5.80 CAD per share, equating to roughly $255 million in total equity value, and a 58 percent premium on MDF’s Toronto Stock Exchange (TSX) March 8 closing price of $3.68.
KKR said it will “leverage the expertise of the existing management team” and continue operations in Québec.
“We are excited to strategically partner with KKR to accelerate our expansion and scale our industry-leading platform even further,” MDF president and CEO Luc Filiatreault said in a statement. “We look forward to leveraging their relationships, resources, and expertise as we execute on our strategy and explore new projects and opportunities that will improve [MDF] commerce’s service offering and continue growing market share.”
MDF was founded in 1996 and provides software-as-a-service solutions for e-commerce interactions between buyers and sellers. Its platform includes automated order processing, content management, payments, as well as other procurement and marketplace offerings.
The firm says it serves over 6,500 government agencies, 650,000 suppliers, and has approximately 650 employees across Canada and the United States.
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MDF debuted on the TSX in 2000 at a share price of $11 and peaked at $20.69 in 2013. Its value tumbled in the late 2010s but bounced up to $16.85 in January 2021. Since then, its stock has been declining and remained between $3 to $4 before the acquisition agreement was announced.
MDF’s go-private deal continues a broader trend in Canadian tech over the last year. Toronto-based investor relations software company Q4 Inc. was delisted from the TSX after closing a $257-million CAD buyout agreement with Sumeru Equity Partners in February. BBTV Holdings and Dialogue Health Technologies went through similar transactions in 2023, while other companies participated in talks to go private at a fraction of their IPO price.
Once MDF goes private, KKR said it will “leverage the expertise of the existing management team,” including Filiatreault, and continue operations in Québec.
KKR will also create an equity ownership program to provide all MDF employees the opportunity to own a piece of the company, something it has done for 60,000 other non-management employees in 40 of its portfolio companies.
The acquisition is expected to close in the second quarter of this year.
Feature image courtesy MDF Commerce.