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Dye & Durham (DYNDF) up 26% after buying Link Group

By Robert Davis

22:46, 22 December 2021

Cellphone with webpage of Canadian software company Dye and Durham Corporation on screen in front of logo
Dye & Durham stock jumps 26% after Link Group purchase - Photo: Shutterstock

The stock of Canadian cloud-based software manufacturer Dye & Durham (D&D) was up more than 26% on Wednesday after the company announced it reached an agreement to purchase one of Australia’s largest information technology businesses for $2.49bn (£1.87bn).

D&D will purchase Link Group and its approximate 43% ownership stake in PEXA Group Limited, a Melbourne, Australia-based property exchange network, as part of the deal.

“This is a transformational acquisition for Dye & Durham and represents a major step forward in our "Build to a Billion" strategy to achieve C$1 billion of adjusted EBITDA," Matthew Proud, D&D’s chief executive said in a press release.

"This transaction will enable us to expand our proven model into adjacent markets, where Link Group's products share the same attributes of our existing offering: digital infrastructure-like assets that provide essential services to clients and their customers and generate stable and sustainable cash flows,” he added.

Transaction details

The transaction is being financed through a combination of debt and equity.

D&D said in the press release that it will pay Link shareholders $5.50 per share, representing a 15% premium above its last closing price.

Oil - Crude

71.18 Price
-0.140% 1D Chg, %
Long position overnight fee -0.0213%
Short position overnight fee -0.0006%
Overnight fee time 22:00 (UTC)
Spread 0.030


41,885.90 Price
-4.360% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00


0.62 Price
-6.700% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.01168


16,141.80 Price
+0.460% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 1.8

Shareholders will receive their distribution of the proceeds from the sale within 12 months of the two company’s scheme implementation plan being accepted by the respective boards.

Link’s shareholders are expected to convene a scheme meeting in the first quarter of 2022, and the deal could close shortly thereafter if it is accepted.

Debt and synergy costs

As for the debt, D&D said it has accepted $2.5bn in financing from Goldman Sachs, J.P. Morgan Chase Bank, and ARES Capital Corporation. The loan has a maturity date of seven years and includes $150m in revolving debt financing.

The company also said it expects to realise almost $98m of synergy costs from the business combination.

Read more: AspenTech, Emerson unveil bn software deal

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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