French PE firm Cap10 to buy Sureserve in £214m deal
Updated : 09:09
Social housing energy services provider Sureserve has agreed to be bought by French private equity firm Cap10 in a £214.1m deal.
Under the terms of the transaction, announced on Friday, Cap10 will pay 125p in cash for each Sureserve share. This represents a premium of around 38.9% to the closing share price on Thursday.
Sureserve said the offer presents an opportunity for shareholders to realise "an immediate and certain compelling value in cash at a meaningful premium" and that the board unanimously intends to recommend that shareholders vote in favour of the deal.
Chair Nick Winks said: "The Sureserve board has great confidence in Sureserve's ongoing strategy which it expects to deliver long-term sustainable operational and financial performance through both organic growth and strategic acquisitions. The Sureserve board does, nevertheless, recognise the time value of money and that no strategy, however well thought through and executed, is immune to a certain degree of risk and uncertainty.
"Under Bidco's private ownership, without the costs and regulation of a listed company, Sureserve should be able to pursue its strategy more productively and thereby sooner achieve leadership in helping our customers transition from traditional heating fuels to renewable alternatives."
At 0905 BST, the shares were up 37% at 123.26p.
Broker Peel Hunt, which rates Sureserve at ‘buy’, said the offer "looks cheap for a market leader with attractive, defensive positions and a strong management team".
"We note that whilst organic growth looks assured (PHe circa 8% over the horizon), Sureserve has only completed one M&A transaction," it said. "We suspect the opportunity to rapidly develop the ‘platform’ for decarbonisation and energy solutions has drawn the PE interest.
"Although we would not discount a competing offer, it seems remote given that we suspect others will have looked in the past (and may have some concerns regarding outlook for gas boiler maintenance and legacy)."