Odd-Lot Tender Offer: $140 upside (at $19.00)
Note: Docebo trades on both U.S. and Canadian exchanges. This write-up refers to the U.S. listing, and all figures are in USD. The opportunity is actionable only for accounts exempt from Canadian withholding tax.
This is already Docebo’s second tender offer this year. In February, it bought back 10% of outstanding shares at $20.4/share (covered here). This time it is repurchasing 13.8% of outstanding shares ($70m total) at the same $20.4/share. Odd-lot holders (accounts with 99 shares or fewer) will get priority treatment. With the stock trading at $19.00, that is $140 of upside per odd-lot account. The details available on this offer are still limited, but the substantial issuer bid circular is expected to be filed today.
Docebo’s paid-up capital is C$11/share, so any amount returned above that figure will be treated as a deemed dividend and taxed accordingly.
Intercap Equity, DCBO’s largest shareholder with a 63.9% stake, has said it will participate in the tender to at least maintain its current ownership percentage.
Overall, this looks like a standard Canadian tender offer that should complete without any issues.
Docebo is a SaaS company that provides corporate learning management software (LMS), allowing SMEs to train their workforce in areas like career development, sales training, and compliance. Until last year, the company grew fast (30%+ CAGR from 2017 to 2023) and traded at a premium 6-8x sales valuation. Last year, growth slowed to low double digits, and the stock price crashed, rerating to around 2x sales. Management has not properly explained the reasons behind the slowdown, but a large part of it appears to be the loss of two major clients (Amazon and Dayforce), which together generated over 10% of ARR.
Management has been saying the stock is undervalued and has started buying back shares aggressively this year. It has even levered up DCBO’s historically clean balance sheet to fund these two tenders.
The previous offer ended up oversubscribed, with proration at 74.5%. Last time, though, Intercap Equity had initially planned not to tender at all, and only changed its mind during the offer period. It ultimately tendered very little, well below the pro-rata amount. This time, having said outright that it will participate “to at least maintain current ownership,” it will probably tender a much larger amount. So the current offer will definitely be oversubscribed again.
I am not too worried about the odd-lot provision getting cancelled. Around 400k odd-lot shares participated in the last tender out of the 2.9m accepted, compared to 3.4m to be bought under the current tender. However, the arb spread was much wider for a long stretch of the previous offer window, after the market got spooked by Intercap’s announcement that it would tender. With no similar surprise expected this time, the risk of odd-lot holders flooding the tender seems low.
DCBO’s financial results have improved a bit since the beginning of the year. The company has raised guidance slightly twice already, with 2026 revenue growth now set at 13.5%, up from the 11% initially expected. Q2 results were also decent and were announced together with the current tender. In April, management released a new operating plan guiding for 10-15% subscription growth and meaningful cuts to operating expenses (in part due to AI-related efficiencies). Some analysts are now projecting the company to reach $80m of adjusted EBITDA by 2028, versus $54m guided for this year. At those earnings, the stock would be trading at 7x adjusted EBITDA. So if one believes in this stable growth + margin inflection story, it is not hard to see why DCBO is rushing to buy back the stock now.
However, it is a bit odd that Intercap Equity has decided to tender twice already, especially after acquiring a 12% stake from Warburg Pincus last year at $18.77/share. Management owns a tiny number of shares and has not been buying much.
A few more things:
– Shareholders holding the Nasdaq-listed shares will be paid in USD, while those holding shares on the Toronto Stock Exchange will receive CAD unless they specifically elect to receive USD.
– The company plans to fund the tender largely through debt ($60m) and cash on hand ($10m). The Company recently increased the size of its credit facility from $100m to $150m.
– More details on tender conditions should be disclosed in the upcoming circular. I expect those to be standard, and overall the risk of the tender getting cancelled or amended seems very low.
Do you know the estimated taxes that would be withheld for US residents?
You need to tender through a retirement account that is exempt from Canadian withholding tax. If you tender through a regular brokerage account, non-resident shareholder taxation applies. For US residents, the reduced 15% treaty rate would apply to the deemed dividend, which is the amount above paid-up capital. In this case, the withholding would be approx. $1.89/share.
Expiry confirmed as Aug 26.
https://docebo.inc/news/news-details/2026/Docebo-Inc–Announces-Commencement-of-Previously-Announced-Substantial-Issuer-Bid-ae1e7d57f/default.aspx
I was just filled at $19 in case anyone is looking for the dip.
DCBO trading above the $20.40 tender price now.
Dr. of Credit and some of the other miles and points bloggers picked this deal up. I’m sure there are a lot of people pushing the price up now.
We can expect these to be worse going forward if a mainstream audience with spoon fed instructions is chasing them :(
It feels more like SaaS ripping when AI ROI is in doubt for this one specifically
The odd lot provision won’t be long for this world once companies realize they’re getting tens of thousands of 99 share tenders from new shareholders post-announcement.
I think this has been said after many odd lot pref, yet there are still a few a year (DCBO 3x in last 3-4 yrs!)
At this point, waiting around for the tender to expire is probably not worth it. DCBO already trades 3% above the offer, and the odds of a meaningful bump don’t look that high. There is still plenty of time before expiration, so there could be another entry point if the stock pulls back.
Trading very substantially above tender price now.
What do you think happens?
Is anybody actually going to tender at just 20.40?
Would seem like the bid would need to be raised considerably, unless the large shareholder needs deep liquidity…
The stock already trades 12% above the tender price, so the market is already pricing in some probability of a bump. Yet, it’s hard to believe they could raise the offer meaningfully above current price. Q2 results also seemed broadly in line with Q1 growth-wise. I doubt this quarter alone changes fair value expectations that much here. Even if a bump comes, there would probably still be some spread to the increased offer, so you probably need the final bid to land around 20–25% above the original offer in order for it to make sense to keep holding at this level. I don’t think that is likely, so just not a great risk/reward.
I doubt companies bump in this scenario, 20.4 was too cheap so they wanted to buy. Dalius do u have any historical evidence?
Docebo reported a pretty substantial earnings beat on Friday, and raised guidance. If anyone missed the pop 2 weeks ago, you’ve got an even better result now with the stock above $23.
Guidance was the same as communicated in preliminary Q2 results in July. So no changes in the outlook. But the final Q2 results did come slightly above the preliminary figures across the board, which almost looks like they’ve been sandbagging intentionally.
Well this is fun:
https://docebo.inc/news/news-details/2026/Docebo-Inc–Announces-Substantial-Issuer-Bid-Price-Increase-and-Extension/default.aspx
Tender offer raised to $25/sh. Stock immediately moves to that price point.
This was quite a surprise, I did not expect the increase in the offer price to be so high, from $20.4 all the way to $25. With hindsight, I have exited prematurely at around $21/share a month ago, but congrats to all who held on to this trade.
Shares are trading below $24.50 for anyone interested in riding this train one more time. Long Live the Odd Lot Provision!