Exfo founder boosts offer to take company private

By Pádraig Belton

Germain Lamonde, who founded Canada’s communications-sector test, monitoring, and analytics equipment maker Exfo and is its majority shareholder, has boosted his offer to take the company private.

Lamonde’s current offer is US$6.25 a share, up from an earlier $6 offer. Shareholders will vote on the offer in a special meeting on Friday. Lamonde is now the company’s executive chairman. He has also chaired the government of Quebec’s digital strategy advisory board as well as ENCQOR, a public-private 5G research partnership.

This ratchets up still further an ownership battle which has been going on since last November. Its rival test and measurement firm Viavi is keen to buy the company, an outcome Lamonde wishes to avoid at all costs. “I’m a builder, not a seller,” Lamonde has said.

Viavi and Lamonde have been offering sequentially higher premiums on the company’s Nasdaq and Toronto Stock Exchange share price, while also trying to sell their respective visions to Exfo’s shareholders. The company’s sales grew 9.8% year-on-year in the three months ending May 31, as fibre deployments and 5G rollouts gained pace, but it still made a net loss of US$3.7 million. EMEA sales grew 20.6% year-on-year and in America 18.4%, though Asia-Pacific sales plummeted by 23.8%. Its testing and measurement equipment was in demand, with sales growing 13.9%; its service assurance and services sales were less so, dropping by 9.6%.

“Many of Exfo’s largest shareholders have confirmed this transaction to be fair, in their best interest,” posts Lamonde on LinkedIn, noting that Institutional Shareholder Services, a third-party proxy advisory firm, is recommending such a vote.

“If I walk in front of your house, and I find it to be wonderful and I want to buy it, it’s up to you if you want to sell or not,” Lamonde has countered, possibly in an inexact analogy for public equity markets.