Docebo Inc. Announces Results of its Substantial Issuer Bid
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The substantial issuer bid by Docebo Inc. to repurchase up to US$100,000,000 of its common shares is a significant financial maneuver that reflects the company's capital allocation strategy. By repurchasing 1,818,181 shares at US$55.00 each, Docebo is signaling a confidence in its intrinsic value, which could be interpreted as an attempt to optimize shareholder value when the market may not fully reflect the company's performance or prospects.
With the repurchase, the company's outstanding shares will reduce by approximately 5.7%, potentially leading to an increase in earnings per share (EPS) and return on equity (ROE) for remaining shareholders. However, it's essential to scrutinize the funding source for this buyback. If it's through debt, it could increase financial leverage and interest obligations. The repurchase also suggests that Docebo may not have identified investment opportunities that could yield a higher return than the implied return of the buyback, which could raise questions about future growth avenues.
The participation of Intercap Equity Inc., which tendered all of its shares and will retain approximately 41.79% ownership post-offer, indicates a substantial change in the shareholder structure. This move could alter the power dynamics within the company, potentially affecting corporate governance and strategic decisions. Stakeholders should monitor Intercap's future involvement and any strategic shifts that may arise from this change.
Furthermore, the oversubscription of the offer and prioritization of 'odd lot' tenders highlight a robust demand for the repurchase, which could be an indicator of shareholder sentiment towards the company's valuation. Market participants often view share repurchases as a positive signal, leading to a potential short-term uplift in the stock's price. However, this effect may vary depending on the market's perception of the repurchase's rationale and the company's underlying financial health.
Share buybacks, such as Docebo's substantial issuer bid, can have broader economic implications. They can affect the distribution of corporate profits, skewing it towards capital returns rather than reinvestment or wage growth. This capital allocation decision may reflect broader trends in the economy, such as low interest rates or a lack of perceived investment opportunities, which could be symptomatic of a maturing business cycle or a cautious business outlook.
From a macroeconomic perspective, the repurchase may also influence liquidity in the market. With a significant amount of capital being used for the buyback, there is less liquidity that could otherwise be deployed into other economic activities or investments. This could have a dampening effect on economic growth, especially if replicated across multiple firms in the economy.
All of the terms and conditions of the Offer have been complied with or waived and, based on a preliminary count by TSX Trust Company (the “Depositary”), a total of 19,347,735 Common Shares were properly tendered to the Offer. Accordingly, the Company expects to take up and purchase for cancellation 1,818,181 Common Shares at a purchase price of
Intercap Equity Inc. (“Intercap”), which beneficially owned 13,589,920 Common Shares prior to the Offer, representing approximately
As the Offer was oversubscribed and there were a significant number of “odd lot” tenders (which are purchased on a priority basis and not subject to pro ration), shareholders, including Intercap, are expected to have approximately
The number of Common Shares to be purchased under the Offer is preliminary, subject to verification by the Depositary and assumes that all Common Shares tendered through notices of guaranteed delivery will be delivered within the two trading day settlement period.
The full details of the Offer are described in the offer to purchase and issuer bid circular dated November 22, 2023, as well as the related letter of transmittal and notice of guaranteed delivery, copies of which were filed and are available on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov.
Forward-Looking Information
This news release may contain “forward-looking information” and “forward-looking statements” (collectively, “forward-looking information”) within the meaning of applicable securities laws, including, without limitation, purchases of Common Shares tendered under the Offer and Intercap’s expected ownership following the Offer.
This forward-looking information is based on our opinions, estimates and assumptions and there is no assurance that any Common Shares will be purchased under the Offer. Although the Company considers such opinions, estimates and assumptions to be appropriate and reasonable as of the date of this press release, they are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including those factors discussed in greater detail under the “Risk Factors” section in our Annual Information Form, available free of charge under the Company’s profile on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov, and should be considered carefully by prospective Investors.
If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information. Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to us or that we presently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. No forward-looking statement is a guarantee of future results. Accordingly, you should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this press release represents our expectations as of the date specified herein and are subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward- looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.
All of the forward-looking information contained in this press release is expressly qualified by the foregoing cautionary statements.
About Docebo
Docebo is redefining the way enterprises leverage technology to create and manage content, deliver training, and measure the business impact of their learning programs. With Docebo’s end-to-end learning platform, organizations worldwide are equipped to deliver scaled, personalized learning across all their audiences and use cases, driving growth and powering their business.
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Mike McCarthy
Vice President – Investor Relations
(214) 830-0641
mike.mccarthy@docebo.com
Source: Docebo Inc.
