Gresham Technologies PLC on Monday said it has agreed to a nearly £150 million takeover offer from funds advised by private equity firm STG Partners LLC.
Shares in Gresham Technologies shot up 25% to 161.00 pence each in London on Tuesday morning, giving the company a market capitalisation of £135.0 million.
The London-based software and services provider said each of its shareholders will be entitled to 163p per share in cash.
Gresham also plans to pay an interim dividend for 2023 of 0.75p per share. This brings the total offer value to 163.75p per share, representing a 27% premium to Gresham’s 129.00p closing price on Monday.
The deal values Gresham Technologies’ entire share capital at around £146.7 million on a fully diluted basis, and implies an enterprise value of about £141.9 million.
Gresham Technologies said the acquisition will be done through a court-sanctioned scheme of arrangement, which it expects to become effective during the third quarter of 2024.
The STG consortium described Gresham Technologies as an ‘attractive and well-established business’. It added that the deal ‘represents an exciting opportunity’ to merge Gresham with STG investee Alveo, which it acquired in January last year.
Gresham explained that while it ‘remains confident...in the potential for further value creation,’ the company ‘recognises that uncertainties and risks exist...many of which are beyond Gresham’s control’ such as ‘the current challenging nature of [its] end markets’.
‘Competition remains intense and the Gresham board notes that many of [its] competitors are often larger, privately owned, free from the constraints and requirements of the public markets and backed with substantial financing,’ Gresham explained.
Gresham’s board will unanimously recommend that shareholders vote for the acquisition at the upcoming court meeting and general meeting.
It noted that its largest shareholder, Kestrel Partners LLP, which has a 23.85% stake in Gresham, supports the deal and has given an irrevocable undertaking to vote in favour of the scheme.
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