HgCapital, a European mid-market buyout firm, has made a 180 pence per share offer for SHL Group, a UK psychometric testing and assessment company.
The offer prices values the business at £100 million (€148 million), and is a premium of 32.7 percent to the average closing price of 135.6 pence since 12 May 2006, when SHL announced that profits for the year to 31 December 2006 would be lower than market expectations.
HgCapital’s bid offer has received acceptances from shareholders representing 44.48 percent of SHL’s existing issued share capital to date.
Deloitte Corporate Finance and Altium are advising HgCapital and the management team. SHL is being advised by Hawkpoint.
If the offer is successful, HgCapital will own 73 percent of SHL, with management holding 19.75 percent and the remainder to be held by the company’s employee benefit trust.
HgCapital will provide £60.4 million in equity and loan notes, with £52 million of senior debt and mezzanine provided by CIT. The management team and SHL’s employee benefit trust will provide £600,000 of equity.
In a regulatory statement, SHL said that its board had approached a number of potential buyers earlier in the year, but discussions did not progress sufficiently. As a result, the management team, headed by chief executive John Bateson, approached HgCapital with a buyout proposal.
Founded in 1977, SHL provides psychometrics assessments for businesses including Tesco, Marks & Spencer, Abbey National, AC Nielsen, Trinity Mirror, Allianz and Citibank. The company reported turnover of £34.9 million for the six months ended 30 June 2006 and pre-tax profits of £3.2 million, slightly down on the comparable 2005 figure of £3.4 million.