London-listed software company Servelec has seen its shares rocket by more than 20 per cent this morning, as it received a £224m offer from private equity firm Montagu.
Servelec, which serves the healthcare, social care, education, oil and gas and energy and utilities sectors with hardware and software, has recommended that shareholders accept Montagu's offer.
It said it had considered splitting its two divisions, one of which focuses on patient administration systems and education technology while the other provides mission-critical control systems to blue-chip companies. However it concluded that selling the business as a whole would be in the best interests of shareholders.
“Servelec has two high quality divisions with significant growth opportunities, both organically and through potential acquisitions,” said Montagu's Edward Shuckburgh.
“We are excited to work with management and employees to support the Servelec Group's growth by investing in and expanding its strong market positions domestically and internationally.”
The directors of Servelec said they had come to the decision, following the approach from Montagu, that the company would be well-suited to private ownership.
They noted that Servelec operates in a number of markets, “each of which is competitive and requires a different strategy”, and a partner like Montagu with a network in the industry would be beneficial.
The directors, who together own 2.2 per cent of the shares, have agreed to sell their stakes, as have other shareholders who together own 32.9 per cent of Servelec.
At least 75 per cent of shareholders need to support the offer at an imminent general meeting in order for it to be viable.
Montagu's offer, of 313.1p per share, represents a premium of 19.8 per cent to the share price immediately before the offer. Servelec listed in 2013 at 179p per share.