Advent International in Talks to Acquire Spectris in £4.4bn Deal
A significant takeover deal is underway in the UK, with private equity group Advent International closing in on a £4.4bn acquisition of London-listed industrial group Spectris. According to a statement released by the companies, Advent and Spectris are in talks over a possible cash deal that would see Advent pay £37.63 a share for the precision measurement instruments maker.
The deal, which would value Spectris’s equity at more than £3.7bn and give the company a £4.4bn enterprise valuation including debt, comes after multiple approaches from Advent. Spectris’s board has indicated that it would be minded to unanimously recommend the deal to shareholders should Advent make a firm offer. The company, a member of the mid-cap FTSE 250, provides high-tech instruments to companies in industries including pharmaceuticals and semiconductors.
In the first quarter, Spectris reported sales of £299mn, a decline from the same period last year amid weakness in markets including automotive, chips and materials. Despite this, shares in Spectris surged 69 per cent on Monday to trade at more than £34 a share, reaching a level not seen since 2021. Analysts at Investec described Advent’s approach as a "good offer", adding that trade buyers "are unlikely to counter-offer at this level".
This deal would mark the latest delisting of a London-listed group, as advisers warn that companies on the bourse are being undervalued by investors. Recent take-private deals include DoorDash’s takeover of Deliveroo, EQT’s acquisition of Keywords Studios, and Thoma Bravo’s deal for Darktrace. The wave of take-private deals comes as the UK simultaneously battles to prevent large public companies from moving their listings overseas, particularly to New York.
The interest in Spectris was first reported by Bloomberg, and was disclosed on the same day US semiconductor group Qualcomm agreed a $2.4bn deal to buy London-listed chip designer Alphawave. Fintech group Wise last week announced plans to follow betting group Flutter, plumbing supplier Ferguson, and building materials group CRH by moving its primary listing to the US.
Under UK takeover regulations, Advent has until July 7 to make a firm offer or walk away. As reported by the Financial Times, a successful deal would see Advent join a growing list of private equity groups snapping up UK-listed companies.
The potential acquisition of Spectris raises concerns about the undervaluation of UK-listed companies, and the challenges faced by the UK in retaining its largest public companies. As noted by the Financial Times, this deal highlights the difficulties faced by UK companies in attracting and retaining investors, and the lure of private equity deals for companies seeking value.
The offer from Advent represents a significant premium for Spectris shareholders, and could have implications for the UK-listed industrial sector. As reported by the Financial Times, a successful deal would also underscore the growing trend of take-private deals in the UK, and raise questions about the future of UK-listed companies.
In related news, several UK-listed companies have recently announced plans to move their primary listings to the US, citing concerns about the UK’s competitiveness in attracting and retaining investors. As noted by the Financial Times, this trend highlights the challenges faced by the UK in retaining its largest public companies, and the need for UK policymakers to address these concerns.
The deal would also mark a significant return for Advent International, which has a history of investing in UK-listed companies. According to the Financial Times, Advent’s interest in Spectris reflects the growing appetite for UK-listed companies among private equity groups, and the potential for take-private deals to deliver value for shareholders.
Overall, the potential acquisition of Spectris by Advent International represents a significant development in the UK M&A market, and highlights the growing trend of take-private deals in the UK. As reported by the Financial Times, this deal has implications for UK-listed companies, and raises questions about the future of the UK-listed industrial sector.
