Pinewood Technologies has agreed to a £545 million takeover by US private equity firm Ridgeview Partners that will see the automotive software provider delist from the London market.
Under the terms of the deal, San Francisco-headquartered Ridgeview will pay £4.48 per share in cash for the company. The price represents a 43 per cent premium to Pinewood's share price before the buyout offer was made.
Pinewood shares rose 4.2 per cent to 444.9p following the announcement. The stock has gained 26.6 per cent overall this year.
Pinewood provides a cloud-based software platform for car dealerships and vehicle manufacturers. Cloud platform technology allows automotive businesses to run dealership management, sales and servicing operations over the internet without needing on-premise IT hardware.
Previous offer and market conditions
The £545 million transaction marks a discount to an earlier takeover proposal for Pinewood made by private equity giant Apax Partners in February.
Apax had proposed a £575.5 million offer for the business before withdrawing its bid. The investment firm dropped its offer citing prevailing challenging market conditions after a wider rout in software stocks.
Private equity firms raise funds from institutional investors to buy publicly listed companies and take them private. Taking a business off the stock exchange allows management to restructure operations away from daily stock price volatility and public market reporting requirements.
Company strategy and leadership response
Ridgeview said it plans to support the business in its next phase of growth as a private company. The firm noted that operating away from public markets offers greater flexibility and operational focus.
Pinewood chair Ian Filby said: "The board recognises that the next stage of Pinewood.AI's growth requires a step change in technology investment and capital expenditure, particularly in data and product innovation."
Filby confirmed that the board has thoroughly reviewed the offer. He added: "Having carefully evaluated the proposed transaction and its terms, the Board believes it represents the best path forward for both the company and its shareholders and intends to recommend unanimously that shareholders vote in favour of the transaction."
Foreign acquisitions of UK listed firms
The deal is the latest in a series of take-private transactions involving British companies acquired by foreign investment firms.
Most recently, US private equity giant Apollo swooped for Easyjet in a £5.7 billion deal, ending its 26-year history on the London stock market.
A string of FTSE 100 companies have also agreed to multibillion-pound offers from overseas buyers, including logistics firm Segro, insurer Beazley and asset manager Schroders. The FTSE 100 index tracks the 100 largest companies listed on the London Stock Exchange.
