Marlowe testing equipment
The company plans to return ‘in excess of £150 million’ to shareholders before any further investment decisions are made / Image source: Marlowe
  • Divestment wipes out debt in full
  • Marlowe to return over £150 million to shareholders
  • CEO Alex Dacre to depart

Shares in Marlowe (MRL:AIM) rocketed 35% higher to 569p on news the business-critical services and software firm has agreed to sell certain GRC (governance, risk and compliance) software and services assets to private equity firm Inflexion for an enterprise value of £430 million.

The announcement set investors’ pulses racing as the disposal proceeds will be used to wipe out Marlowe’s debts, estimated at a shade over £180 million by Berenberg.

Marlowe also plans to return ‘in excess of £150 million’ to shareholders before any further investment decisions are made.

More than exceeding Marlowe’s undisturbed market cap, the sale proceeds account for roughly 20% of group revenues and 40% of adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) and the divestment will leave Marlowe fully focused on its core compliance service markets.


Marlowe is selling all its GRC assets with the exception of its Occupational Health businesses - this means its Compliance Software, Health & Safety Compliance, Employment Law & HR, and ISO Certification segments.

Once the transaction competes, Marlowe’s business will consist of two market-leading compliance service divisions in Testing, Inspection and Certification and Occupational Health.

Marlowe said the divestment marks the culmination of a strategic review focused on generating ‘major shareholder value whilst simplifying the group’s focus and strategy upon its core Compliance Services businesses’.

These deliver recurring service revenues in large and attractive regulated markets and have ‘significant scope for future growth’.


On completion, CEO and 5% shareholder Alex Dacre, who has been instrumental in turning Marlowe into a major UK regulatory compliance market player, will transfer to the divested business and resign as CEO.

Kevin Quinn will take on the executive chair role on an interim basis and the board has kicked off the search for a new CEO, with both internal and external candidates being considered.

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Quinn insisted the sale represents ‘an excellent outcome for Marlowe and its shareholders and underscores the significant value that has been created through the delivery of our growth strategy. The valuation achieved demonstrates the substantial potential within our business and will reset our capital structure, giving Marlowe strategic agility whilst delivering meaningful returns to our shareholders.’


Overall, said Berenberg, the announcements are ‘undoubtedly positive for shareholders following a turbulent period for the company’s share price’.

The broker, which has a ‘buy’ rating and 720p price target for Marlowe, sees a strong argument for a higher valuation ‘given that the group’s balance sheet has been de-risked, capital can now be reinvested in growth, and the group’s future equity story is significantly cleaner than it has been of late. This is our view, although we expect this may take time to pan out, as the company’s future strategy is made clear.’



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Issue Date: 22 Feb 2024