Data provider Information Services Corp. ISC-T has attracted a number of potential buyers, including at least three pension fund managers, after facing an activist campaign and launching a strategic review this fall.
Regina-based ISC, one of the country’s largest property registers, received non-binding takeover offers from four bidders last week as part of a process launched by its board in early September, according to two sources familiar with the process.
The Globe and Mail is not naming the sources because they are not permitted to speak for the companies involved in the process.
The non-binding bids value the Toronto Stock Exchange-listed company at up to $58 per share, or approximately $1-billion, the sources said.
On Friday, ISC had a $774-million market capitalization, based on a closing price of $41.40 per share. ISC’s stock price is up 57 per cent so far this year.
Bids came from the Investment Management Corporation of Ontario (IMCO), Northleaf Capital Partners, the Ontario Municipal Employees Retirement System, or OMERS, and Australian fund manager Queensland Investment Corp (QIC), the sources said. All of the fund managers have significant infrastructure investments.
In the new year, ISC’s advisers and board are expected to decide whether to move forward on negotiations with any of the bidders, the sources said.
On Friday, ISC and OMERS declined to comment on the strategic review. Representatives from IMCO, Northleaf and QIC could not be reached for comment on the weekend.
ISC is a digital infrastructure company that generates dependable cash flow from fees on real estate transactions, a business model that suits the long-term investment goals at pension plans and other institutional investors.
ISC’s contract to provide property-registration services in Saskatchewan runs to 2053. The company also has a nine-year contract with the Ontario government, signed in August, to provide digital environmental property information.
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ISC’s largest shareholder is a provincial government agency, Crown Investments Corporation of Saskatchewan (CIC), which owns a 29.3-per-cent stake and supported the decision to launch a strategic review.
The Saskatchewan government wants to maintain ISC’s head office in Regina and ensure that the company’s growth continues to benefit the province, factors that will play a role in determining a buyer, one of the sources said.
Toronto-based OMERS already owns land-registry Teranet, a business that is similar to ISC. Teranet holds long-term contracts with the Ontario and Manitoba governments. OMERS bought the business in 2008 for $2-billion.
One of the sources, working with a rival bidder, said there are concerns that OMERS would cut jobs at ISC if it bought the company and merged its land-registry operations with Teranet.
ISC has successfully expanded from its roots as a property register by building digital services that include the Irish Charities Regulator, which does registration and regulation of all charities that carry out activities in the European country. ISC won the Irish contract in 2017.
ISC began the strategic review after entrepreneur Matthew Proud’s holding company, Plantro Ltd., launched an activist campaign last spring that included an offer to buy up to 15 per cent of ISC. The ISC board called Plantro’s mini-tender bid “abusive and coercive.”
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Mr. Proud is the former CEO of Dye & Durham Ltd. and has been involved in a series of governance battles with the digital infrastructure company. Until 2017, ISC owned a 30-per-cent stake in Dye & Durham. ISC sold the position when Dye & Durham bought a competing business, OnCorp Direct Inc.
Plantro is a significant shareholder in ISC and Mr. Proud continues to be involved in the strategic review but has not made an offer for the company, the sources said.
Investment bank RBC Capital Markets and law firm Stikeman Elliott LLP are advising the ISC board on the review, while investment bank CIBC Capital Markets is working with CIC.
ISC went public in 2013 and has 560 employees. Last year, the company had net income of $20.2-million on revenues of $247.4-million, along with adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $90.3-million.
Canadian private-equity takeovers are coming at a blistering pace, as managers invest billions committed to their funds by institutional and individual investors.
In the first nine months of the year, PE funds invested $56.5-billion in 483 domestic transactions, the strongest period on record, according to the Canadian Venture Capital and Private Equity Association.
Equivalent periods from 2017 to 2019 averaged between $8-billion and $25-billion across 400 to 450 deals, “highlighting how the market is advancing beyond prepandemic norms,” the CVCA said.