Investing.com-- Shares of Australian cloud software provider Dropsuite Ltd (ASX: DSE ) surged on Tuesday after U.S.-based NinjaOne bid to acquire the company, valuing it at A$420 million ($263.1 million).

The all-cash offer of A$5.90 per share represents a 34% premium over Friday’s closing price.

The Dropsuite board has unanimously recommended shareholders approve the deal, citing it as a compelling opportunity to realize their investment at an attractive premium.

Shares of the company soared 30% reaching A$5.78 after the news.

The bid comes amid strong financial performance by Dropsuite. The company reported a 37% year-on-year increase in annual recurring revenue (ARR) to A$49.8 million for the quarter ending December 31, 2024, with a total paid user count of 1.65 million, up 42% from the previous year. Additionally, Dropsuite maintained a robust product gross margin of 70% and ended the quarter with A$28.6 million in cash and no debt.

"While the Board is highly confident in the long-term fundamentals and growth prospects of the Company, we believe the Scheme represents a compelling opportunity for shareholders to realise their investment in Dropsuite, for 100% cash at an attractive premium to where Dropsuite has historically traded," company's Non-Executive Chairman Theo Hnarakis said in a statement.