(Alliance News) - Shares in Marlowe PLC jumped on Thursday, after the company accepted a lucrative offer for its software and services assets.
Marlowe is a London-based software company providing regulatory compliance services to businesses in the UK. Shares in the company were up 24% at 525.70 pence each in London on Thursday afternoon.
This came after Marlowe's announcement that it had entered into a binding agreement for the sale of its governance, risk & compliance software and services assets to Inflexion Private Equity Partners LLP.
The deal has an enterprise value of GBP430 million, which Marlowe said represents 121% of the company's total market capitalisation on February 20. Marlowe's market cap currently stands at GBP509.58 million.
Marlowe said that the divestment, which accounts for around 20% of Marlowe's revenue, contributed GBP85.8 million in revenue and GBP31.4 million in earnings before interest, tax, depreciation and amortisation in the year ended March 31.
The company said that it intends to use the proceeds to retire in full its current debt facility and return in excess of GB150 million to shareholders.
Marlowe said it views the sale as the culmination of the company's recent strategic review, which outlined its focus on generating shareholder value while "simplifying the group's focus and strategy upon its core compliance services businesses".
Marlowe's Chair Kevin Quinn commented: "This divestment represents an excellent outcome for Marlowe and its shareholders and underscores the significant value that has been created through the delivery of our growth strategy. The valuation achieved demonstrates the substantial potential within our business and will reset our capital structure, giving Marlowe strategic agility whilst delivering meaningful returns to our shareholders.
"Following the sale, Marlowe's business will consist of two market-leading compliance service divisions in testing, inspection and certification and occupational health, with a clear and refocused strategy in our core compliance service markets."
The company also announced that current Chief Executive Alex Dacre will transfer and lead the divestment following the deal's completion. Dacre will be replaced by Kevin Quinn on an interim basis, before a permanent replacement can be secured.
By Hugh Cameron, Alliance News reporter
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Marlowe (MRL)