Dye & Durham (TSX: DND) stock a buy as it revises Link takeover offer?

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Dye & Durham (TSX: DND) stock a buy as it revises Link takeover offer?

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 Dye & Durham (TSX: DND) stock a buy as it revises Link takeover offer?
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Highlights

  • Stocks of Dye & Durham (TSX: DND) fell by nearly two per cent on Monday, June 27
  • Dye & Durham has revised its proposal to acquire Link Administration (TSX: LINK)
  • The Canadian tech company saw its revenue spike by 78 per cent year-over-year in Q3 2022

Stocks of Dye & Durham (TSX: DND) have been garnering attention since the Canadian tech company revised its acquisition proposal with Australian company Link Administration Holdings (TSX: LINK), previously announced in December last year.

The tech scrip fell by nearly two per cent to close at C$ 22.23 on Monday, June 27. It continued this decline on Tuesday morning, having tumbled by 1.7 per cent to C$ 21.85 at 9.54 AM EST.

What should investors learn about Dye & Durham's revised proposal and overall performance? Let's find out.

Dye & Durham-Link Administration revised proposal

The revised offer includes a reduced purchase price consideration of A$ 4.30 per LINK share, relatively down from A$ 5.50 proposed in December 2021. Besides this, the Canadian technology company said it is considering an undertaking to receive regulatory approval from the Australian Competition and Consumer Commission (ACCC) under the Scheme Implementation Deed (SID).

This undertaking came as the ACCC initiated a more extensive and comprehensive Phase II review for the Link acquisition in mid-June and is expected to provide a final decision on September 8 this year. 

Some market experts believe that Dye & Durham stock could gain if Link’s Board approves and the ACCC accepts this revised offer. On that note, let us look at this TSX-listed tech company's performance.

Dye & Durham’s Q3 FY2022 financial results

The cloud-based tech provider saw its revenue spike by 78 per cent year-over-year (YoY) to C$ 122.9 million in Q3 2022, mainly due to revenue growth from acquisitions made in the last one year and realized revenue synergies.

The smallcap technology company said that this increased revenue boosted its operational profit, which in turn, narrowed down its net loss by C$ 3.6 million YoY to C$ 7 million in the latest quarter.

Realized revenue synergies from acquisitions also expanded its adjusted EBITDA by 78 per cent to C$ 66.8 million in the latest quarter compared to the prior year’s quarter.

Dye & Durham (TSX: DND)’s Q3 2022 financial results

Dye & Durham’s stock performance

DND stock decreased by over 54 per cent in 52 weeks. However, this tech scrip recorded a gain of over one per cent in the past month.

As per the Refinitiv data, DND’s Relative Strength Index (RSI) was approximately 52 (moderate level) on June 27. The price-to-earnings (P/E) ratio, which represents a stock’s overvalued or undervalued market condition, was 66.7 for Dye & Durham.

Bottomline

Tech stocks could be risky as they have been in the red for most of 2022. Notably, the TSX information technology index has fallen by nearly 36 per cent year-to-date (YTD).

However, growth investors looking to invest long-term could consider healthy TSX tech stocks like Dye & Durham as it continues to expand its business footprint despite the prevailing market conditions.

Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

Stocks of Dye & Durham (TSX: DND) have been garnering attention since the Canadian tech company revised its acquisition proposal with Australian company Link Administration Holdings (TSX: LINK), previously announced in December last year.

The tech scrip fell by nearly two per cent to close at C$ 22.23 on Monday, June 27. It continued this decline on Tuesday morning, having tumbled by 1.7 per cent to C$ 21.85 at 9.54 AM EST.

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