Contract research group Ergomed PLC (AIM:ERGO, ETR:2EM) has joined the growing number of companies turning their backs on the UK stock market after agreeing to be taken private by PE giant Permira in a £703.1 million deal.
Investors, including founder Miroslav Reljanović, who has an 18% stake, will receive 1,350p a share in cash – though they can also opt for a partial securities alternative.
The bid terms are at a 28% premium to Friday’s closing price, a third higher than the six-month volume-weighted share price.
On that basis, Ergomed’s enterprise multiple, a valuable yardstick for deal valuations, is 24 times underlying earnings (EBITDA).
The company, which performs outsourced research for large pharma companies, is one of many businesses exiting the stock market here in the UK amid a post-Brexit decline in liquidity and stubbornly low valuations.
Law firm Mayer Brown says 13 companies have beaten a retreat in the 12 months ended June 30, including Dechra Pharmaceuticals for £4.5 billion, financial services group Sanne (£1.5 billion) and Ted Baker (£300 million).
Senior independent director John Dawson said the takeover would allow Ergomed to pursue its acquisition plans backed by the deep-pocket Permira.
"While this strategy is anticipated to generate substantial long-term value for shareholders, we also note that the next phase of growth will require investment into the commercial expansion and technological transformation of the business as well as additional capital to undertake transformational M&A,” Dawson told investors.