Shares in Metrofile, a document specialist group, surged by as much as 17% on Wednesday after the company received a buyout offer of R3.25 per share from a special purpose company, valuing the deal at a maximum of R1.37 billion.
In late March, Metrofile had informed the market of an unnamed suitor’s interest in acquiring the company and appointed an independent board to evaluate the offer. On Wednesday, further details regarding the deal’s valuation, conditions, and settlement mechanisms were disclosed.
Metrofile announced it has entered into an implementation agreement with the special purpose company and its holding firm, Mango Holding Corp. The company emphasized that this offer presents a significant opportunity for shareholders to realize value and for key stakeholders to engage in its digital expansion.
The offer allows Metrofile shareholders to cash out at a premium compared to the volume-weighted average price of their shares over the 30 trading days leading up to March 25. Additionally, it is expected to generate substantial value for Metrofile’s broad-based BEE shareholders.
During morning trading on the JSE, shares rose by 17% but settled slightly lower by the afternoon, showing a 14.23% increase at R2.97. To date, the share price has increased by 30% over the year.
Founded in 1983 and listed on the JSE since 1995, Metrofile’s largest shareholder is the Mineworkers Investment Company (MIC), holding 39.2%. Other significant investors include Project Sauter at 8.53%, Afropulse Group at 0.11%, and Sabvest Investments at 4.97%.
Valued at R1.29 billion on the JSE, Metrofile operates across 36 locations with 72 facilities encompassing 119,000 square meters of warehousing space. It provides records and information management services in South Africa, Kenya, Botswana, Mozambique, and the Middle East, with South Africa contributing more than half of its revenue.
Major investors, who collectively own 52.81% of Metrofile’s equity, have given irrevocable commitments to support the buyout offer.
The acquisition is seen as a crucial step in accelerating Metrofile’s digital transformation, which began in 2016, and enhancing access to expertise and new markets. The company stated that its employees, customers, and partners would benefit from improved digital services and information management solutions aligned with strategic growth and innovation.
For the buyer, the offer represents a strategic opportunity to create a diversified platform in information management and digital services, leveraging Metrofile’s established presence and brand in key African and Middle Eastern markets.
Metrofile indicated that discussions with Main Street 2093, the special purpose vehicle for the transaction, are progressing and are at an advanced stage, although regulatory engagements have extended the timeline.
Upon implementation of the deal, Metrofile will be delisted from the JSE.