Ideagen shares up 47% as software firm agrees to £1.1bn takeover by private equity firm Hg – with a rival bid still possible
- Hg’s offer of 350p per share ‘fair and reasonable’, Ideagen board says
- Directors have unanimously invited shareholders to back the offer
- Ideagen also remains in talks with Astorg – another private equity bidder
Tech firm Ideagen is set to fall into private equity hands after its board recommended an offer from London-based buyout firm Hg valuing it at £1.1billion.
Ideagen, which sells software to help businesses and governments comply with regulations, said Hg’s all-cash offer of 350p per share was ‘fair and reasonable’ and directors unanimously invited shareholders to accept it.
However, the takeover battle may not be over yet, as in a separate statement, the company said it also remained in talks with Astorg – another private equity bidder – which has been granted access to due diligence.
Private equity takeover: Ideagen is set to become the latest UK firm to be taken private
Ideagen shares, which are listed on London’s AIM market, jumped 45 per cent to 353p in morning trading, suggesting that investors are expecting a counter bid from France’s Astorg.
The Nottingham-based firm said Hg’s offer represented a 52 per cent premium to Ideagen’s closing price of 230p on 11 April, the day before shares jumped amid speculation about a potential offer.
Ideagen chairman, Richard Longdon, said the offer represented value for shareholders.
‘The all-cash offer represents a compelling and attractive opportunity for shareholders to realize and crystallize their investment in Ideagen in the near term and also provides a significant premium to the prevailing share price notwithstanding the backdrop of the wider risks posed by the political and macro -economic environment.
‘The offer reflects the quality, strength and long-term performance of Ideagen’s businesses and its future growth potential. We believe that Hg’s track-record and expertise in supporting and growing software businesses would provide a complementary partner for Ideagen’s stakeholders.’
Christopher Fielding, Joris Van Gool and Jean-Baptiste Brian, partners at Hg, pledged to keep the company in Nottingham.
‘Our experience in the sector gives us a strong conviction that Ideagen represents a high-quality platform, and we are committed to providing additional capital and resources that are required to further support and enhance Ideagen’s next phase of growth,’ they said.
‘We recognize that Ideagen is a global organization with stakeholders around the world, but with deep community ties and a strong local heritage.
‘We strongly believe that the core of the business should be maintained in its Nottingham base, including its executive team and technological development centre.’
Stellar growth: Ideagen shares have gone from 33p in 2014 to £3.56 today
For the takeover to go ahead, at least 75 per cent of Ideagen shareholders will need to vote in favor of the deal at the company’s general meeting.
The group has grown rapidly since floating on the junior AIM market in 2014, with shares soaring from 33p to £3.56 today.
Ideagen has around 7,500 customers worldwide, including more than 250 UK and American hospitals, nine of the top ten accountancy firms and three-quarters of all major drug companies, as well as numerous aviation and defense groups.
Its clients include Heineken, British Airways and the Bank of New York.
The takeover battle for Ideagen comes amid a wave of bids for British firms listed on the stock market from buy-out firms following the stockmarket crash in March and April 2020.