Endurance International Group Holdings, Inc. (EIGI), a provider of cloud-based platform solutions for small and medium-sized businesses, said Monday it has agreed to be acquired by affiliates of private equity firm Clearlake Capital Group L.P. in an all-cash transaction valued at about $3.0 billion, including debt.
Shares of Endurance are gaining more than 60 percent or $3.52 in pre-market activity to $9.33.
Under the terms of the deal that was unanimously approved by the Endurance Board of Directors, affiliates of Clearlake will acquire all of the outstanding common shares of Endurance for $9.50 per share in cash.
The purchase price represents a 79 percent premium over Endurance’s unaffected share price of $5.30 on September 25, 2020, the last trading day prior to media speculation about a potential transaction. The proposed transaction is expected to close in the first quarter of 2021.
Endurance said it will promptly hold a special meeting of its shareholders following the filing of a definitive proxy statement with the U.S. Securities and Exchange Commission or SEC.
The company noted that certain affiliates of Warburg Pincus and Goldman Sachs Private Equity Partners have entered into a voting agreement that commits them to vote about 36 percent of the outstanding shares of Endurance common stock in favor of the acquisition agreement.
Clearlake will finance the transaction with a combination of committed equity financing from the Clearlake funds and has secured committed debt financing for the proposed transaction that is not subject to any financing condition. Upon completion of the acquisition, Endurance will become a wholly owned affiliate of Clearlake.
Endurance said it is releasing its third-quarter 2020 financial results concurrent with the acquisition announcement.
The company reported third-quarter net income of $6.67 million, down from $7.82 million in the year-ago period. However, earnings per share were unchanged from the prior-year period at $0.05. Revenue increased to $278.43 million from $277.19 million a year ago. Revenue rose 3 percent from the year-ago period to $278.43 million, excluding SinglePlatform.
On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.02 per share for the quarter on revenues of $276.16 million. Analysts’ estimates typically exclude special items.
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