Shares in Eleco PLC (AIM:ELCO) spiked 70% to 229.02p in morning trading after the London-listed construction software company agreed to a £207.6 million cash takeover by American private equity firm Accel-KKR.
Shareholders will receive 235p for each share, a premium of almost 75% to Eleco's closing price of 134.5p on Tuesday, the day before the deal was announced.
The offer values the AIM-listed group, once a maker of building and lighting equipment before reinventing itself as a software provider, at more than 20 times its earnings for last year.
Eleco's board, advised by Stephens, has unanimously backed the deal and intends to recommend that investors vote in favour.
Directors and major shareholders holding 45.2% of the company, including investment house Allen & Co and members of the founding Ketteley family, have already pledged their support.
The board said Eleco's shares did not fully reflect the transformation of a business that now generates most of its revenue from subscription software used across the building lifecycle, from design and construction to maintenance.
It added that competing as a standalone company would require years of heavy investment in cloud platforms and artificial intelligence, with the risks that carries.
Accel-KKR, which has raised more than $23 billion since its founding in 2000 and specialises in mid-market technology firms, said it would back Eleco's next phase of growth.
The takeover is expected to complete in the first quarter of 2027, subject to shareholder and regulatory approval.
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