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Lombard Risk Management plc: THE INVESTMENT CASE

Lombard Risk agrees to 13p a share cash offer

"Vermeg's acquisition of Lombard Risk will create a leading global financial software provider," said Badreddine Ouali, founder and chairman of Vermeg
Mergers & acquisitions - takeover
INVESTMENT OVERVIEW: LRM The Big Picture
Vermeg regards the management and employees of Lombard Risk as key to the ongoing success of the combined entity

Banking and compliance software company Lombard Risk Management plc (LON:LRM) surged higher today after the firm agreed to a 13p a share takeover offer from Vermeg Group.

The shares shot up to 12.5p, over 90% above last night’s close of 6.55p after the news.

READ: Lombard Risk's contract win helps to underpin full-year expectations

The terms value Lombard at around £52.08mln. Vermeg has received irrevocable undertakings to accept the offer from shareholders accounting for around 38.8% of the issued share capital of Lombard.

Tunis-based Vermeg has provided information technology solutions to the financial services and insurance industry for more than 15 years and has become a key partner for custody/asset management and life assurance solutions in Europe.

For its part, Lombard Risk’s flagship COLLINE product is a major player in the field of monitoring, tracking and valuing the funds put up as collateral for a trade. The company is also a market leader in bank regulatory reporting software.

Vermeg expects that Lombard Risk will continue to operate as it does today under its existing executive management team within the Vermeg Group once the acquisition is completed.

READ: Lombard Risk Management unlocking revenue

"The combination of Vermeg and Lombard Risk has very strong commercial logic,” said Philip Crawford, the chairman of Lombard Risk.

“The combined group will benefit from a range of complementary products and solutions, increased scale, a broader international presence and have the ability to accelerate growth through investment and wider routes to market.

“In reaching the decision to recommend this offer the Lombard Risk board has considered in detail the best interests of all stakeholders and the company as a whole. We believe that Vermeg's all-cash offer provides shareholders with certainty of value at a level in excess of the risk adjusted prospects of Lombard Risk on a standalone basis," he added.

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