In a surprise announcement made July 26, Dialogue Health Technologies Inc. says it has entered into a definitive arrangement with Sun Life Financial Inc., where Sun Life will acquire all issued and outstanding shares – for a 43.1 per cent premium over Dialogue’s closing share price on July 25, 2023.
Shareholders are expected to receive $5.15 per share in the all-cash transaction. The company’s board of directors have unanimously recommended that shareholders vote in favour of the transaction. Dialogue adds that the premium being offered is also 59.4 per cent higher than the 20-day volume-weighted average trading price. Overall, “the consideration implies an equity value for Dialogue of approximately $365-million,” they state.
According to the announcement, Portag3 Ventures LP, Portag3 Ventures II Investments LP and WSC IV LP, the company’s supporting shareholders, holding approximately 21 per cent of Dialogue’s outstanding common shares, along with each of the directors and executives of the company have entered into voting and support agreement stating they will vote in favour of the transaction. All told, shareholders holding approximately 30.5 per cent of the company’s outstanding common shares have agreed to vote in favour of the transaction.
The company says Dialogue will maintain its head office in Montreal and operate as a standalone entity as part of Sun Life Canada. The company’s management team is also expected to remain in their current roles.
“The acquisition of Dialogue by Sun Life is highly complementary and beneficial to the two organizations as they share a purpose of helping Canadians live healthier lives. As the premier integrated health platform in Canada, with a distinctive management team and entrepreneurial culture, Dialogue will fit naturally as a core strategic pillar of Sun Life Canada,” the company states. “Importantly, Dialogue will continue to execute its strategic plan and grow its business.”
They add that a fairness assessment was conducted by both National Bank Financial Inc. and Scotia Capital Inc., which each concluded the transaction is fair to shareholders from a financial point of view.
“The transaction is the result of a strategic review process undertaken by the company. With the assistance of its financial advisor, and the oversight of the strategic committee, comprised of independent directors, the company conducted a market check after the receipt of an initial proposal from Sun Life and contacted various potential financial and strategic purchasers across North America, following which the offer by Sun Life emerged as the highest proposal.”