Dye & Durham Ltd, a Canadian Software firm, has signed an agreement to purchase Telus Corp., a payments business firm. This is the first deal by the company since their proposed management buyout was forsaken in October.
As per Bloomberg news, the acquisition of Telus Financial solutions for C$500 million ($391million) will enable Dye & Durham control of the software that handles 140 million bills and tax payments every year. The Toronto-based company is also on the verge of buying another technology that allows banks and lenders to connect with law firms whenever a new mortgage is being created, or an existing one discharged.
Stocks of Dye & Durham rose to C$39.75 at 9.48 a.m. in Toronto, up by 2.8%.
The CEO of the company, Matt Proud, said that Dye & Durham plans to use the payment infrastructure of Telus to help channelize money to residential real estate deals. The software is being used to process home sales in Quebec province. The expansion of the technology across the country will reduce paperwork and make real estate transactions more efficient.
Most mortgage transactions involve plenty of papers and checks made for each transaction and couriered, resulting in risks for potential frauds. Putting together on a single platform will drive the future with a value proposition for the Dye & Durham customers, said Proud in an interview.
In July 2020, Dye & Durham went public with $7.50 a share and quickly became a standout IPO of Canada as it rose to above $50 by the end of 2020. The company provides databases and software to legal houses to help lawyers complete real estate deals, wills, estates, and corporate filings, among other services.
Proud and a group of executives proposed to go for private placement at $50.50 a share after the stock declined. However, the largest shareholder, Mawer Investment Management Ltd, opposed this idea, who joined forces with other investors to quash the move.
Dye & Durham has come under criticism from some members of the legal profession for imposing the software on home purchase and financing, which lead to price increase in the real estate transaction. The company had informed about 1000 firms in British Columbia that it will raise fees on a particular software by 563% as per a Globe and Mail newspaper report.
The price increase reflects the efficiency value that Dye & Durham will bring to on law firm’s table. Proud said,” We will continue to invest significantly to improve our customer’s experience and ability to do the job better as this acquisition of Telus demonstrates.”
Imperial Bank of Commerce is the financial advisor to Dye & Durham on the Telus acquisition, and Goodmans LLP is the legal advisor.
