PRA Group, Inc. (NASDAQ:PRAA), a financial portfolio manager considered by Fortune as one of the 100 Fastest Growing Companies for three consecutive years, announced on Monday a public tender offering to fully acquire DTP SA for $1.23 per share, amounting to nearly $43.75 million, assuming that the former fully acquires all shares of the latter.
PRA Group plans to use its cash in Europe and borrowings under its European credit facility to complete the acquisition of DTP, whose shares are publicly traded on the Warsaw Stock Exchange.
Before PRA Group revealed the offer, which represents a 16% premium to the three-month average share price of DTP, investors had finalized an agreement to tender their shares in anticipation of the offering.
According to Steve Fredrickson, PRA Group CEO and Chairman, Poland has a highly active nonperforming loan (NPL) market. Consequently, acquiring DTP will allow PRA Group to further grow in the consumer NPL market. Fredrickson believes that the acquisition will help the company to expand its operational efficiencies, living up to its goal of growth in Europe.
Robert Ditrych, CFO of Paged Group believes the offer means a profitable outcome for the investors of DTP. In line with this, Ditrych expressed Paged Group’s commitment to offer 49.50% of its DTP shares to the tender, believing that this effort will help DTP grow more than it will as a stand-alone company.
Completion of the Acquisition
The transaction is subject to a number of conditions, which include the tenders being obtained in respect of at least 80% of the outstanding shares of DTP. Moreover, the completion is also subject to the approval of the Polish Anti-Monopoly Office (UOKiK).
Once all conditions and regulation standards have been met, PRA Group can proceed to withdraw all acquired DTP shares from public trading, delisting DTP from the Warsaw Stock Exchange.
The subscription will begin on March 18 and end on April 18. The tender offer is expected to be settled as early as April 26.