The Dominion Diamond Corporation of Canada on Monday agreed to a $1.2 billion deal with Montana billionaire Dennis Washington, a move that will privatize one of the world's largest diamond companies.

Under the agreement, The Washington Companies will acquire all of Dominion's outstanding common shares for $14.25 per share, or a total equity value of $1.2 billion.

The offer price was 5 percent higher than the Missoula-based company's March offer of $13.50 per share, which Dominion rejected as too low. The company's directors have agreed to vote their common shares in support of the deal, according to a company release.

“The Washington offer delivers compelling and immediate value to Dominion shareholders at an attractive premium that recognizes the intrinsic value of Dominion and provides shareholders certainty through an all-cash offer,” said Jim Gowans, chairman of Dominion Diamond Corporation's board of directors.

Dominion owns a majority stake in the Ekati mine and a minority share of the Diavik mine in Canada's Northwest Territories.

Gowans said The Washington Companies will serve as a responsible and long-term operator, one that will help build Dominion’s assets while extending the life of its Ekati mine.

According to the agreement, Washington plans to keep Dominion's headquarters in Canada and invest in new greenfield development. The company also plans to invest capital in the Jay and Fox Deep projects.

Washington also looks to focus recruitment and employment of Indigenous people and continue scholarship programs to assist with community development programs, the company said.

“Dominion Diamond has an excellent collection of mining assets and a talented and experienced management team and workforce,” said Lawrence Simkins, president of Washington. “We share a commitment to providing long-term benefits to all Dominion stakeholders and to the Northwest Territories and its local communities.”

The proposed transaction is subject to Canadian regulatory approvals. The deal, which is expected to close by the end of the year, also requires approval from more than two-thirds of Dominion shareholders.

“Dominion believes this transaction is an excellent outcome for the company’s stakeholders, including employees, community members and the Northwest Territories,” said Gowans. “The transaction allows the operation to take the next steps in mine development and ensures mining and its associated benefits continue in the North for decades to come.”