US private equity group TPG has made a formal offer for London-listed hedge fund administrator GlobeOp Financial Services worth £508 million (€610 million; $804 million). It has been recommended by independent directors appointed by the company's board.
The deal, if successful, would be the first take-private of an LSE-listed business by a private equity group since HgCapital's acquisition of Group NBT in September, according to data provider Dealogic.
The offer price of 435 pence per share represents a substantial premium to the company's public market value – 49 percent to its closing price on 5 January, the last day prior to the announcement that the company was in discussions with TPG; and 23 percent more than its share price on 31 January.
Buyout peer Advent International is understood to have reached the final round of bidding for the company before losing out to TPG. Advent could not be reached for comment by press time.
The offer price also represents a multiple of 11 times the company’s adjusted operating profit for the 12 months to 30 June 2011, GlobeOp said.
TPG will fund the purchase using $291 million (£184 million) of debt, provided under an interim facility arranged by Credit Suisse, together with equity from its $19.8 billion 2008-vintage TPG Partners VI fund.
The firm has extensive experience in the financial technology sector. Its previous investments include account processing group Fidelity National Information Services and insurance software business Vertafore.
Bryan Taylor, a partner of TPG, said in a statement: “GlobeOp is a strong global financial services company with a high quality offering and a robust business model, which we plan to invest in and grow. TPG is committed to enhancing GlobeOp’s position as a leading independent operator and to working with its customers, employees and management to continue the success of the company.”
A number of GlobeOp shareholders have already accepted the offer. These include US private equity firm TA Associates, which owns 5 percent of the company. Other shareholders include Aberforth Partners, Columbia Wanger Asset Management, Sageview Capital and Standard Life Investments.
TPG said it has received irrevocable undertakings from investors holding about 44 percent of GlobeOp’s equity to accept its bid.
GlobeOp chairman Ed Nicoll said the company welcomed TPG’s offer, which he said was the result of “an extensive and competitive process over the last few months”. The company began a strategic review last year.
JP Morgan Cazenove and law firms Linklaters (lead counsel) Cleary Gottleib (financing, competition and regulation) are advising TPG on its bid. Ashursts, Evercore Partners, BofA Merrill Lynch and Espirito Santo Investment Bank are advising GlobeOp. Travers Smith is advising GlobeOp’s management team.