This morning, a number of companies are going to come into focus among investors as another trading week swings into action, and one of the companies that may well be in focus is HS GovTech Solutions Inc. (OTC:HDSLF). The company is one of the leading SaaS (software as a service) application providers for the government. On November 17, it came into the news cycle after it announced that the Supreme Court of British Columbia had provided it with approval for its statutory plan of arrangement pertaining to the Business Corporation Act.
Following the approval, the British Columbia-based subsidiary of a United States private equity fund run by Banneker Partners LLC would pick up the issued and outstanding shares in HS GovTech Solutions Inc. The company further noted that the transaction would be conducted entirely in cash and that the consideration would be $0.54 per share. If the closing conditions are met and the regulatory approvals are awarded, then the transaction could be closed at some point around November 22, 2023. Once the transaction is completed, the shares of HS GovTech Solutions will be delisted from the Canadian Securities Exchange, and it will stop being a reporting issuer as per Canadian securities laws.
The company had been in the news cycle on September 25 when it announced that it had appointed a new audit firm in the form of Davidson & Company LLP. The newly appointed audit firm replaced Hay & Watson. It was noted in the news release at the time that the Board of Directors of the company accepted the resignation tendered by the former auditors on September 11, 2023.
The appointment of the successor auditor, Davidson & Company, went into effect the next day. It was further noted that Davidson & Company would be in place as the auditor of HS GovTech Solutions up until the following annual general meeting of shareholders. However, the company had also pointed out that there had been no modified opinions or reservations expressed in any of the former auditor’s reports. In addition to its board of directors, the audit committee also approved the resignation of the former auditor and the appointments of the successor one.
The agreement with regards to the acquisition by the United States private equity fund operated by Banneker Partners LLC was first announced by the company on September 18. At the time, it was revealed that the total transaction value would stand at $33.3 million. The purchase price of $0.54 per share also worked out to a premium of 151.2% on the closing price of the stock the previous day. A committee that had been made up of the directors of HS GovTech Solutions and the members of the board of the company had made a unanimous recommendation to the shareholders to vote in favor of the deal. The chairman of the board, Ali Hakimzadeh, spoke about the matter at the time too. He noted that everyone at the company was pleased with the transaction, which would provide a significant premium to the shareholders.