Robotic process automation company Blue Prism (PRSM:AIM) has recommended an £11.25 takeover bid from private equity firm Vista Equity Partners.
The offer equates to a premium of approximately 35% to Blue Prism’s closing price of 832p on 27 August, being the last business day before the offer period commenced.
The shares have fallen 2.5% to £11.59 on the firm offer, implying that the market had expected more generous terms and had bid up the stock ahead of the offer news.
However, the fact they still trade above Vista’s offer price means that investors expect a higher bid in time, either from the current bidder or another party.
Blue Prism is a virtual workforce disruptor which uses robotic process automation technology to automate manual back-office administration tasks.
The benefits to the customer of adopting this technology are significant. It reduces costs and enables the workforce to transition from low to high value-added tasks. In addition, it enhances the level and speed of customer service and circumvents the need for investment in new IT systems.
The efficacy of RPA technology is vindicated by Blue Prism’s extensive portfolio of over 2,000 clients. These include Telefonica, Fidelity, Siemens and Ebay.
The takeover offer will exacerbate existing concerns regarding the long term impact of British companies being acquired by overseas buyers. The confluence of Brexit and the Covid-19 pandemic have resulted in valuations for UK companies becoming depressed, particularly when viewed within a global or transatlantic context.
This has prompted a series of takeovers for British companies. In February, Dialog Semi was acquired by Japan’s Renasas Electronics for $5.6 billion, and in July Tencent snapped up Sumo Group for $1.26 billion.
The acquisition of Blue Prism by an overseas company is particularly concerning because it is a member of relatively small cohort of fast-growing technology business with a truly differentiated product offering.
Blue Prism’s RPA technology is increasingly becoming a critical component in driving digital transformation. This explains Vista Equity Partners’ motivation in acquiring the group.
While the acquisition is clearly good news for shareholders in Blue Prism, the emerging trend of innovative fast growing British technology companies being acquired by overseas entities is more disconcerting.