AIM-listed Alpha Financial Markets Consultancy has agreed to a takeover deal by private equity giant Bridgepoint.
The specialist consulting firm, which employs over 900 companies globally, has agreed a price of around £626m, or 505 pence per share, it said in a stock exchange announcement today.
Currently valued at £548m by the market, Alpha FMC’s stock price spiked by 24 per cent to its highest level in almost a year in the run-up to the announcement, from 385 pence to 479 pence.
The offer is over 50 per cent higher than the firm’s share price of 335 pence on 30 April, the company noted, which was when the offers began coming in.
AIM-listed companies have become strong targets of takeovers, with the number on the marketplace dropping like flies as private equity giants scoop them up.
Takeovers of AIM companies have jumped 75 per cent in the last year, reaching their highest point in over a decade.
The offer for Alpha FMC came after reports emerged last month that both Bridgepoint and rival private equity investor Cinven had approached the company about a potential deal.
In the announcement, Alpha FMC said that as a private company, Bridgepoint believed it would be able to take a longer-term view, as well as allowing it to use Bridgepoint’s ‘firepower’ to execute targeted M&A.
The takeover bid will be put to shareholders at the company’s general meeting, requiring 75 per cent to vote in favour of the deal.
Key Fry, chair of Alpha FMC, said: “Since its AIM admission in 2017, Alpha FMC has successfully developed into a leading global consultancy to the financial services industry and delivered strong growth in revenues and profits through a proven strategy of deepening client relationships, broadening the client offering and geographic expansion.
“Whilst Alpha FMC is well-positioned to make continued progress, the Alpha FMC independent directors believe that the acquisition recognises the quality and value of the business and represents an opportunity for Alpha FMC shareholders to realise their entire investment, in cash, at an attractive premium.”
The consultancy firm also reported today that net fee income growth had increased by 2.8 per cent in the twelve months to 31 March, slightly below expectations of three per cent, and down from the five per cent expected by the company in February.
Adjusted earnings before interest, tax, deprecation, and amortisation (EBITDA) came in at £42.2m, in line with the expectations of between £42m and £43m announced in April.
CEO Luc Baque said the group’s trading cycle had been “resilient”, despite the continued challenging market environment and longer sales cycle.
“While the supply and demand dynamics continue to rebalance, the current market still faces certain challenges,” he added.