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Highlights
- Bidco has reached an agreement for a recommended cash acquisition of Eckoh, valuing the company at approximately £169.3 million.
- Eckoh shareholders will receive 54 pence per share, representing significant premiums to recent closing prices and average trading values.
- Bridgepoint aims to leverage Eckoh's market position for growth through strategic investments and expansion initiatives.
The Boards of Bidco, an indirect and wholly-owned subsidiary of certain funds managed by Bridgepoint Advisers II Limited (LSE:BPT), have announced a recommended cash acquisition of Eckoh. This acquisition will see Bidco acquire the entire issued and to-be-issued share capital of Eckoh, valuing the company at about £169.3 million on a fully diluted basis, with an enterprise value of approximately £161.8 million. The transaction is structured to benefit Eckoh's independent shareholders, who will receive 54 pence in cash for each Eckoh share they hold.
The offer price of 54 pence per share represents a significant premium over Eckoh’s recent market performance. It is approximately 11.34% higher than the closing price of 48.5 pence on August 21, 2024, the last trading day prior to the commencement of the Offer Period. Additionally, it reflects a 24.14% premium over the closing price of 43.5 pence on August 15, 2024, and a 30.87% premium to the volume-weighted average price of 41.26 pence for the three-month period ending August 21, 2024. Furthermore, it marks a 34.98% premium compared to the six-month volume-weighted average price of 40.01 pence.
The acquisition terms indicate a substantial 28.43% premium over the median EV/EBITDA multiple of 12.4x observed in recent M&A transactions involving UK-listed technology peers. Upon reviewing the offer, Eckoh's directors concluded that it represents an attractive premium and a full valuation for the business.
The transaction will be executed through a Court-sanctioned scheme of arrangement between Eckoh and its shareholders, although Bidco retains the right to pursue a Takeover Offer if deemed necessary. It is also important to note that should Eckoh announce any dividends or returns of capital before the effective date of the acquisition, Bidco reserves the right to reduce the consideration payable to shareholders accordingly.
Bridgepoint has expressed a strong interest in Eckoh, seeing it as a leading provider of secure payments and customer engagement software. The firm believes that Eckoh is positioned well within a niche market that stands to benefit from ongoing investment in technology, the rise of omnichannel interactions, and an increasing focus on data security. With additional investments, Bridgepoint aims to unlock Eckoh’s potential through geographic expansion, product innovation, and targeted acquisitions, enhancing the company’s customer base and driving long-term growth.
Bridgepoint’s confidence in Eckoh’s future prospects is underpinned by its belief that the business will thrive under private ownership. This structure allows Eckoh's management to have greater flexibility in executing their investment strategies while aligning with a majority shareholder that supports their long-term vision.
