British software company Instem has been bought by French private equity group Archimed SAS in a £200m deal
Software giant Instem is the latest UK company to be bought by a foreign private equity vulture.
French private equity firm Archimed SAS has agreed to buy the Staffordshire company for £203m, adding to the list of companies set to exit the London stock market.
The company agreed to a cash offer of 833p per share – 41 per cent higher than Instem’s share price on Tuesday and sent Instem shares up 39.8 per cent or 235 pence to 825 pence yesterday.
Instem has been listed on the London Aim market since 2010 and provides drug development IT services to the global life science market. The company employs around 500 people worldwide and is represented in the USA, China, India, Japan and Switzerland.
Chairman David Gare said: “The offer represents an attractive valuation and provides shareholders with the security of receiving cash today, while adequately reflecting the exceptional quality of Instem’s business, its people and its future prospects.”
“Privately held, without the expense and regulation of a public company, Instem will be able to continue its growth strategy.”
Research Tool: Instem provides drug development IT services for the global life science market
Gare is expected to fetch around £4.8m from the sale, while chief executive Phil Reason is expected to make a profit of £6.8m.
The sale comes a day after Cambridge life sciences company Abcam was taken private in a £4.5 billion takeover by US technology group Danaher.
Private equity approaches for London-listed companies will also be pursued this year.
Veterinary giant Dechra has agreed to a £4.5bn takeover by Swedish company EQT, while real estate firm Industrials REIT has been delisted following a £500m takeover by Blackstone.
The takeover activity – which comes on top of a raft of other deals and approaches this year involving the likes of Dignity, Hyve and John Wood Group – has raised concerns that UK companies are being bought up at cheap prices.
And fears for London’s reputation are mounting as the capital’s bourse struggles to attract the largest companies.
Sophie Lund-Yates, analyst at Hargreaves Lansdown, said: “It seems like a foreign private equity firm is stepping up its efforts to buy out UK companies.”
Unfortunately, this is due to the fact that the UK is quite unloved – hence the valuation of UK companies looks quite attractive.”