U.S. private equity firm Advent International has agreed to buy British electronics and technology business Laird (LRD.L), the firms said on Thursday, valuing it at around 1.2 billion pounds ($1.65 billion) including debt.
Laird shareholders will be entitled to 200 pence in cash for each Laird share held, valuing its issued equity at around 1 billion pounds, compared to the closing price per Laird share of 115.9 pence on Feb. 28. This represents a premium of 72.6 percent, compared to 30-50 percent – a typical takeover premium according to a banker on the deal.
Shares were up slightly above 200 pence in morning trade indicating that traders think there will likely be another bidder who will offer more for the firm.
The Laird directors, advised by Rothschild (ROTH.PA), JPMorgan Cazenove (JPM.N) and Numis (NUM.L), consider the terms of the deal to be “fair and reasonable”, the company said in a statement.
High asset prices in private transactions are increasingly pushing buyout funds to target publicly listed companies.
Letters of intent representing 5.89 percent of issued share capital of Laird, which makes wireless communication equipment and technology for automated systems, have been received.
Laird on Thursday reported an annual operating profit of 76.9 million pounds, up from 61.9 million.
The company completed a 185 million pound rights issue in April 2017 that reduced borrowings and altered its capital structure to enable investment.
“In my first year as CEO, we’ve simplified structures, enhanced the quality of the leadership and focused on improving the efficiency and profitability of all Laird’s operations. These actions have delivered much improved results, and have built strong foundations for the future,” Chief Executive Tony Quinlan said.
Volatility in foreign exchange rates, however, presents a significant headwind for sterling profits in 2018, the company said.
Advent has invested in more than 330 buyout transactions in 40 countries. It had 35 billion euros in assets under management as of Sept. 30 2017.