KKR swoops on AIM construction software firm for £208m
Private equity giant KKR has struck a deal to buy an AIM-listed construction software company in the latest of a wave of takeovers on the London Stock Exchange this year.
In partnership with venture capital firm Accel, KKR has snapped up Eleco for £207.6m in a deal backed by the company’s board.
Shareholders are in line for a 235p per share payout, representing a mammoth 74.7 per cent premium over the previous session’s closing stock price.
Eleco shares, which trade on London’s junior stock market, have suffered a choppy last 12 months, reaching as low as 105p. On Wednesday, the stock closed at 134p leaving it down 18 per cent for the last year.
Investors holding 45.2 per cent of Eleco’s shares have already pledged support for the takeover, which is targeted to close by early 2027 subject to court approvals.
In its trading update in July, Eleco posted revenue growth of eight per cent to £19.9m, driven by a 14 per cent increase in recurring subscription and software maintenance income to £16.9m.
The group provides software and related services for architectural, engineering and construction industries that is tailored to niche markrets such as timber frame and staircase manufacturing.
Its subscription sales generate 85 per cent of its total revenue, which has helped send its recurring revenue – a metric tracking predictable yearly client billings – to a record £35.5m.
The deal follows a flurry of UK M&A activity, that have stripped the City of some of its biggest names on both its junior and main market.
As of 1 September, announced acquisitions of UK-listed public companies topped $132.5bn, according to figures from the London Stock Exchange Group. This was nearly triple the $48.2bn in the same period last year.
Last Wednesday, a trio of London-listed firms all accepted bids from foreign buyers, sparking rallying calls for action from officials.
Takeovers of FTSE 250 firms Bodycote and Gamma Communications, as well as energy company Capricorn, topped £3bn helping extend the record raid on the City.