No liquidity, no chance: Another London-listed firm heads for the exit door
London-listed software firm Gresham Technologies has been bought out for just under £150m by an American private equity firm.
Announcing the move to markets this morning, Gresham will be purchased by Alliance Bidco, a company owned indirectly by funds managed by STG Partners, a US PE firm.
It will combine Gresham with another of its portfolio firms, Alveo.
Gresham’s board said that the “low level of liquidity” on the London Stock Exchange was one of the deciding factors for giving up its public listing – a now-regular refrain from small and mid-cap listed firms.
Each shareholder will be entitled to receive 163 pence in cash as part of the offer, with directors entitled to a dividend of 0.75 pence per share.
Gresham and Alliance told markets that the acquisition values the public firm at around £146.7m and would be subject to Gresham’s shareholders.
It added that Gresham’s directors considered the offer “fair and reasonable” and that they “intend unanimously to recommend” shareholders back it as a court meeting for shareholders.
In the update to markets this morning, Bidco said the deal “represents a compelling opportunity to acquire an attractive and well-established business providing post-trade processing solutions to capital markets participants.”
It also said: “The acquisition represents an exciting opportunity to combine Gresham with its portfolio company, Alveo, which Bidco acquired in January 2023 with the aim of building a global and differentiated enterprise data management and governance platform for the capital markets tech ecosystem.
This comes after Gresham Technologies has secured a contract worth $1.5m (£1.2m) for its Clareti Control platform, designed to help financial institutions control their data.
Back in November, shares the company tanked after it told markets it was discontinuing its low-margin legacy service, costing it £8.5m.
Commenting on the Acquisition, Richard Last, chairman of Gresham, said: “We believe the cash offer provides a good opportunity for Gresham shareholders to realise fair and certain value and an exciting way for Gresham to compete more effectively in its global markets and to continue the Clareti journey started over a decade ago.”
Marc Bala, managing director at STG and a director of Bidco, said: “We couldn’t be more excited about bringing together two leading financial technology providers and leveraging the respective strengths of each company to drive greater value for our combined customers.
“By combining Gresham with Alveo we will create a capital markets data management specialist that offers clients greater scale and a range of solutions to facilitate their business processes. We look forward to welcoming Gresham to the STG family.”