FrontRange`s share was trading at 570c on the JSE this morning - 23c or 3.9% down on Friday`s 593c close.
The group, best known for its GoldMine customer relationship management software, announced late on Friday plans to dispose of its subsidiaries and delist.
US private equity firm Francisco Partners has offered to acquire all three of the group`s operating subsidiaries for $185.2 million.
The FrontRange board has endorsed the offer, subject to a review of the fairness and reasonableness of the deal by an independent financial advisor.
The offer, which at recent exchange rates amounts to about 618c a share on a fully diluted basis, is for US-based FrontRange Solutions, Russian company Cayo Communications and FrontRange Solutions SA.
FrontRange says it plans to distribute the proceeds of the sale to shareholders as a capital payment and dividend distribution, on which secondary tax on companies would have to be paid.
"We have explored numerous options during the past year, all with the aim of finding a way to unlock shareholder value, while at the same time being fair to all FrontRange stakeholders," says chairman Dana Buys.
"The board engaged US investment bank Jefferies Broadview to do a strategic evaluation of the various options available to FrontRange, in the context of the nature of the company`s business and the exchange control rules applicable to South African shareholders."
He adds that SA`s exchange control rules made it difficult to list FrontRange Solutions on the Nasdaq.
FrontRange CEO Michael McCloskey says the deal ratifies the group`s strategy of providing valued solutions to its customers and is the next step in building a global market leader.
A Nasdaq listing has been one of the stated goals of McCloskey, appointed in 2003 to replace Patrick Bultema. Before taking up the FrontRange post, McCloskey took several companies to the Nasdaq, in CFO, president and CEO roles. These include Kana Communications, Genesys Telecom and Network Appliance.
McCloskey will remain at the helm of the company, and his executive team will remain intact. FrontRange Solutions SA will continue to be headed by MD Tracey Newman.
"This investment by Francisco Partners will enable FrontRange Solutions to continue to pursue our aggressive growth strategy," McCloskey says. "We are committed to providing our customers and partners with market-leading products and superior service and support. This investment further strengthens that commitment."
Share