Events and exhibitions firm Tarsus Group Plc (LON:TRS) has agreed to a takeover by Tiger Acquisitions UK Limited, a subsidiary of funds advised by private equity firm Charterhouse Capital Partners, with a cash deal pitched at 425p per share, valuing the firm in total at around £561mln.
The recommended transaction also allows for a final dividend of 7.7p per share to be paid to Tarsus shareholders. Excluding the dividend, the takeover offer represents a 36.2% to Thursday’s closing price for Tarsus shares.
It is effectively a buy-out of the company’s public shareholders, with the business expected to continue under its new private equity ownership.
“We believe that the acquisition provides significant value for Tarsus's shareholders, whilst ensuring that Tarsus can continue its journey as a leading exhibitions business with an owner that can provide the capital and industry experience to support Tarsus's future growth,” said Neville Buch, Tarsus chairman.
“We believe that the acquisition is in the interests of Tarsus's shareholders, employees and customers and we look forward to seeing Tarsus continue to grow going forward."
Robert Leeming, partner at Charterhouse, added: "We are delighted to invest in Tarsus Group and to support Doug and the management team in continuing the impressive growth they have achieved over the past years.
“They have built a wonderful business with leading exhibitions in growth sectors across the globe. We are committed to growing the business further, and supporting it with additional capital and expertise to accelerate its growth trajectory in the future."
The takeover offer has been recommended by the Tarsus independent directors and has been backed by major shareholders representing some 42% of the eligible votes at the upcoming general meeting.
Could there be a counter-bid?
City broker Liberum Capital reiterated its ‘buy’ rating on Tarsus shares and highlighted counter-bid possibilities.
In a note to clients, Liberum’s analysts said; “We have previously highlighted that Tarsus is an attractive asset for private equity bidders due to highly visibility of future revenues due to rebookings from delegates, strong cash generation with cash paid up front before shows begin and low price elasticity.
“We have seen previously M&A activity in exhibitions with Blackstone acquiring Clarion events & NEC for 13x/11.5x EBITDA respectively.
“Applying an average multiple of 12.25x to our FY19E EBITDA forecasts would value Tarsus at 520p per share, which could prompt another bid.”
In Friday afternoon trading, Tarsus shares were up 37.5% to 429p.
-- Adds analyst comment, updates share price --