Kohlberg Kravis Roberts, the global buyout group, is buying Northgate, a UK-listed provider of specialist software, outsourcing and information technology services, at a price of 95 pence in cash per share.
The recommended bid values the company at £593 million ($1.2 billion; €819 million)
The price is a premium of 40.5 percent to the average closing price of 67.6 pence per share for the month ended 11 December 2007, the business day before Northgate's announcement that it had received an approach.
Northgate’s directors, who have been advised by Rothschild, have sad they consider the terms to be fair and reasonable.
In addition, GAP North, a company owned by growth investor General Atlantic, which holds 68,780,000 Northgate Shares and Jos Sluys, a director of Northgate, who holds 45,349,200 Northgate Shares, have each today sold to KKR’s bid vehicle at the offer price.
KKR has acquired or received irrevocable undertakings of approximately 19.9 percent of Northgate's issued share capital.
SVG, a UK private equity investor and fund manager, has built a 2 percent stake in Northgate since the summer. SVG said in its results in the six months to June it had spent £3.6 million building a stake in Northgate. SVG said: “We expect the company [Northgate] to de-gear and re-rate as it delivers better than expected growth.”
KKR, advised by Goldman Sachs, said the acquisition will be implemented by way of a court-sanctioned scheme of arrangement.
Todd Fisher, partner of Kohlberg Kravis Roberts, said KKR’s experience in the technology services sector would help the management team grow Northgate into a leading international provider of software solutions and outsourcing services to the human resources and public sector markets.