Bond International (BDI:AIM) has entered a conditional agreement with FMP Global Bidco to sell its payroll subsidiaries, Bond HR and Payroll Software, Bond Payroll Services and Eurowage, for £29.4 million.
Investors are confident that Bond can receive more than £15 million for the remaining parts of the business, prompting nearly a 10% jump in early trading. This softened to an 8.4% rise to 111.1p.
An extra £15 million-plus would equate to more than the company recently turned down from its major shareholder Constellation Software. It had offed to buy the whole company in a 105p per share deal, but Bond's board said no.
FMP Global Bidco is backed by Tenzing Private Equity and the sale is conditional on shareholder approval, which includes £2 million of debt owed by Eurowage.
The sale is part of Bond’s strategy following an in-depth review. It has considered various options such as a partnership or acquisitions to increase the group’s divestment, as well as selling the company and new bank facilities to support investment.
This will be Bond’s second disposal after selling its wholly owned subsidiary, Strictly Education, to Education Services Solutions for £11.3 million in May.
Analysts believe the sale of Strictly Education and its payroll business means Bond will generate less, noting that in the year to December 2015, it generated an operating loss before amortisation of acquired intangibles of £1.2 million on revenues of £17.8 million.
This is significantly less compared to the prior year, which featured a profit of £0.4 million on revenues of £18.7 million.