Points.com Incorporated has entered into an arrangement agreement for all of its issued and outstanding common shares to be acquired by Plusgrade — which is a leading ancillary revenue platform for the global travel industry — for $25.00 per common share in cash, which places a value of approximately $385 million on the transaction.
Points.com To Be Acquired By Plusgrade For $385 Million
Both companies — which are based in Canada — outlined the highlights of the transaction in this official press release:
- Attractive Premium for Shareholders: Consideration of $25.00 in United States dollars per common share represents a 45 percent premium to Points’ closing price on the Toronto Stock Exchange on Friday, May 6, 2022 and a 52 percent premium to the 20–day volume-weighted average per common share on the Toronto Stock Exchange for the period ending on Friday, May 6, 2022.
- Certainty of Value and Liquidity: The $25.00 in United States dollars per common share cash consideration to holders of Points common shares — “Shareholders” — provides certainty of value and immediate liquidity.
- Limited Conditions to Closing: Plusgrade’s obligation to complete the Transaction is subject to a limited number of closing conditions that the board of directors believes are reasonable in the circumstances. Completion of the Transaction is not subject to any financing condition. Plusgrade is a credible purchaser with significant financial backing from reputable institutional investors, Investissements Novacap Incorporated and Caisse de dépôt et placement du Québec.
- Value Supported by Two Fairness Opinions: Each of RBC Capital Markets and Blair Franklin Capital Partners Inc. provided an opinion to the Board stating that, subject to the assumptions, limitations and qualifications to be set out in the fairness opinion, as of Friday, May 6, 2022, the consideration to be received under the Transaction is fair, from a financial point to view, to the shareholders.
A degree of overlaps among their partners — as well as the opportunity to take advantage of synergies — potentially exists between the two companies once they have merged.
The stock of Points.com increased from $17.17 per share on the NASDAQ stock exchange on Friday, May 6, 2022 to $24.46 per share on Monday, May 9, 2022, which represents a gain of $7.29 or almost 42.46 percent.
Points.com represents itself as “a trusted partner to the world’s leading loyalty programs” which “builds, powers, and grows new ways for members to get and use their favorite loyalty currency.” When you purchase points or miles from certain frequent travel loyalty programs — such as in this article pertaining to the sales of miles and points from earlier today as part of a regular series of articles here at The Gate — you are likely doing so through Points.com, which is based in Toronto.
Plusgrade — which is based in Montréal — represents itself as a leading ancillary revenue platform for the global travel industry.
Final Boarding Call
Points.com is an affiliate partner of The Gate — meaning that if you purchase points through one of the articles which feature sales on miles and points from airlines and lodging companies, I earn a modest commission.
Subject to the satisfaction or waiver of all conditions to closing, the transaction is expected to close in early July 2022; and Points.com will eventually be delisted from both the NASDAQ Capital Market and the Toronto Stock Exchange.
I do not believe that this transaction will have any adverse effect on customers who purchase miles or points in the future — but no specific details have been given as to how the combined company will operate moving forward.
Photograph ©2021 by Brian Cohen.
