Payments software firm Eckoh is set to leave the London Stock Exchange’s AIM after it received an offer from private equity firm Bridgepoint.
The bid values Eckoh at 54p per share or £169.3m.
The price is offered is 15.9 times Eckoh’s adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the year ending March 2024.
This offer marks an 11.34 per cent premium over Eckoh’s share price of 48.5p on 21 August, the last trading day before the offer period.
For the deal to proceed, it will need 75 per cent shareholder approval and clearance from the UK government under the National Security and Investment Act (NSIA).
Eckoh has seen a record year so far, driven by its software and secure payment solutions and greater progress in North America. For the year ending 31 March, its total contracted business rose by 52 per cent to £52.6m.
Eckoh chairman Chris Humphrey said: “Late last year – and based on the Board’s belief that Eckoh’s share price did not reflect the fundamental value of the business -the Company began to consider alternative options to realise value for shareholders in conjunction with its advisors.
“The Eckoh Independent Directors are recommending Bridgepoint’s proposal based on its compelling value proposition for Eckoh’s shareholders and the benefits that Bridgepoint’s investment in the Company is expected to bring to stakeholders in the Company.”
Bridgepoint is a private asset growth investor managing €67bn (£55.7bn). It specialises in private equity, credit, and infrastructure.
Alan Payne, partner and deputy head of Bridgepoint Development Capital, said: “This offer represents a strong premium and allows Eckoh shareholders to realise attractive value. Eckoh is an international leader in a niche software sector and at the cutting edge of customer engagement technology, and we are real admirers of the platform.
“There is a growing need for businesses to establish secure customer payment solutions as new contact channels, payment methods and compliance regulations emerge and customer requirements evolve,” he added.
It comes as the number of AIM companies has fallen below 700 for the first time since 2001, amid speculation that a key tax relief for AIM shares may be scrapped in this week’s Budget.
According to data from UHY Hacker Young, some 92 companies have delisted from AIM in the past year, bringing the total number of companies on the exchange to just 695.