Equals Group (LON: EQLS) is recommending a bid from a bid vehicle owned a consortium comprising TowerBrook Funds, JC Flowers Funds and Railsr shareholders. The 104p/share cash offer values the AIM-quoted multi-currency payments company at £283m.
The bid is 135p/share in cash with a special dividend payment of 5p/share. The divided should be declared before the completion of the acquisition. The bid is equivalent to 19 times prospective earnings, falling to 15 next year. Net cash of £22m is forecast for the end of 2024, rising to £41m by the end of 2025.
Railsr is a pan-European embedded finance platform, and it approached Equals with the backing of other fintech investors. The consortium believes that combining the two companies will create a European market-leading business where growth can be accelerated.
The bid vehicle will also acquire Railsr so that the two companies can be integrated.
There are irrevocable acceptances of 16.5% of the share capital of Equals. Threadneedle Asset Management owns 12%, Schroders 10.1%, JP Morgan 4.79% and MI Chelverton UK Equity Growth 3.24%. These shareholders have not accepted the bid as yet. They could still have a significant say in the success of the bid at this level.
The share price increased 15.5p to 135.5p.