SINGAPORE - TDCX Inc. (NYSE: TDCX), a provider of digital customer experience solutions, has agreed to a buyout by a group led by its Founder and CEO, Mr. Laurent Junique. The transaction values the company at approximately $1.037 billion.
The buyer group, which currently holds about 86.1% of TDCX's shares, representing 98.4% of voting power, has entered into a definitive Merger Agreement with Transformative Investments Pte Ltd and its subsidiary, Helium. Under the agreement, TDCX will become a privately-held company and a direct wholly-owned subsidiary of the parent company.
Shareholders of TDCX's Class A and Class B ordinary shares, excluding certain shares as defined in the Merger Agreement, will receive $7.20 per share in cash without interest. American Depositary Shares (ADSs), each representing one Class A Share, will also be cancelled in exchange for the same cash consideration per ADS, less applicable fees and expenses. The merger consideration represents a premium of 48% over the closing price of the company's ADSs on December 29, 2023, and a 17% premium over the closing price on February 29, 2024.
The Board of Directors of TDCX, acting on the unanimous recommendation of a Special Committee of independent and disinterested directors, approved the merger. The Special Committee negotiated the terms with the assistance of financial and legal advisors. As the merger is a short-form merger under Cayman Islands law, it does not require a shareholder vote.
The merger is expected to close in the second quarter of 2024. Upon completion, TDCX's ADSs will be delisted from the New York Stock Exchange, and the ADS program will be terminated.
Financial advisors for the Special Committee include Houlihan Lokey (NYSE:HLI) (China) Limited, with legal counsel provided by Hogan Lovells and Maples and Calder (Hong Kong) LLP. Goldman Sachs (Singapore) Pte. is advising the Buyer Group, with legal counsel from Skadden, Arps, Slate, Meagher & Flom LLP and Travers Thorp Alberga.
This news is based on a press release statement.
InvestingPro Insights
In the wake of TDCX Inc.'s announced buyout, investors are closely monitoring the company's financial health and market performance. According to real-time data from InvestingPro, TDCX has a market capitalization of $901.75 million, which is notably less than the buyout valuation of approximately $1.037 billion. This discrepancy suggests that the buyout offer carries a premium, aligning with the reported 48% premium over the December 29, 2023 closing price.
Further analysis from InvestingPro highlights that TDCX is currently trading at a P/E ratio of 8.21, which is lower than the adjusted P/E ratio for the last twelve months as of Q3 2023, sitting at 10.98. This positions the company at an attractive valuation point relative to its historical earnings. Additionally, the company has demonstrated a solid financial structure, as it holds more cash than debt on its balance sheet and its cash flows can sufficiently cover interest payments, according to InvestingPro Tips.
Investors may also find reassurance in the company's short-term financial stability, as its liquid assets exceed its short-term obligations. This is a critical factor to consider, especially when the company is transitioning to a private entity. For those interested in a deeper dive into TDCX's financials and future outlook, InvestingPro offers a range of additional tips—there are 9 more InvestingPro Tips available for TDCX, which could provide investors with a comprehensive understanding of the company's investment potential. To access these insights, visit InvestingPro's TDCX page and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
The recent performance metrics also reveal a strong return over the last three months, with a price total return of 18.46%, indicating a recovery trajectory despite a year-over-year price total return of -50.96%. Analysts predict the company will be profitable this year, which could be a driving factor behind the buyout decision. These insights underscore the importance of evaluating both current performance and future prospects when considering the implications of the buyout for shareholders and the market at large.
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