LONDON (Alliance News) - Shares in tender-management software firm EU Supply PLC jumped Friday after it agreed a GBP16 million all-cash takeover by Norwegian peer Mercell Holding AS.
Mercell will pay 18.25 pence per share in cash for EU Supply, valuing the firm at GBP13.1 million, based on its currently issued shares capital, and GBP15.7 million if all holders of convertible loans to EU Supply converted these to shares.
The offer price represents a 40% premium to the 13.00p per share price of EU Supply at the market close on Thursday. Shares in EU Supply were 19% higher at 15.50 pence on Friday.
"EU Supply has achieved a significant milestone in its development, with a profitable platform for growth achieved in 2018," EU Supply Chief Executive Officer Thomas Beergrehn said.
Beergrehn explained that EU Supply had grown revenue from GBP1.8 million in 2013 to GBP5.1 million in 2018.
"Furthermore, in the year to date, EU Supply has achieved its highest ever rate of increase in annual recurring revenue run rate, up in excess of 25%, without any higher staffing levels," Beergrehn added. "We anticipate continued growth in annual recurring revenue during the coming months and years."
Beergrehn continued, however, that the firm recognises the "restrictions of being a relatively small quoted company and believes that the combination with Mercell creates significant synergies and the option to accelerate growth as part of a larger entity."
"This transaction also represents an attractive and quicker value proposition for all EU Supply shareholders than what we expect would have been achieved in the short-to-medium-term on a standalone basis," Beergrehn added. "The board of EU Supply therefore, unanimously, recommends Mercell's offer."