Global investment bank swoops for listed PTSG in £265m deal
A global investment banking and financial services firm has announced its intention to acquire specialist services provider Premier Technical Services Group (PTSG) in a deal valuing the listed firm at £265.3m.
Bidco, a newly-incorporated company established on behalf of Macquarie Principal Finance Pty, the UK branch of Macquarie Group, announced its acquisition plans for the Castleford-headquartered business this morning. PTSG directors have recommended that shareholders approve the plan.
As part of the deal, PTSG’s CEO Paul Teasdale and managing director Roger Teasdale would reinvest the proceeds from the sale of a proportion of their PTSG Shares to Bidco. This amounts to £16.3m and £1.8m respectively. They would also participate in a new management incentivisation plan (MIP).
Bidco said that “certain other senior managers” had agreed to invest or reinvest in aggregate £1.4m in the Bidco Group.
Under the terms of the acquisition, PTSG shareholders would receive 210.1 pence for each share held. PTSG shareholders would be entitled to receive and retain the Final Dividend of 0.9 pence per share.
Bidco said: “In view of Paul Teasdale and Roger Teasdale’s extensive experience in the PTSG Group’s business and track record of driving growth and profitability at PTSG, the board of Bidco believes that the ongoing participation of these individuals in the business after the Effective Date is an important element of the Acquisition. Paul Teasdale and Roger Teasdale will continue as Chief Executive Officer and Managing Director respectively following completion of the Acquisition.”
John Foley, Chairman of PTSG, said: “PTSG undertook an IPO in February 2015 with a clear plan to grow both organically and through carefully selected acquisitions. Between the financial year ended 31 December 2015 and the last financial year ended 31 December 2018, reported revenue and adjusted EBITDA have grown at an average annual rate of 39% and 40% respectively. PTSG continues to have a significant pipeline of carefully identified acquisition opportunities which it would like to execute to confirm a strong position in the chosen niche specialist testing and compliance sectors in which it operates.
“Against the backdrop of an increasingly competitive market for acquisitions, with a need to close deals quickly and fund them effectively, I believe that Macquarie’s deep access to funding will better position PTSG to continue with its acquisitive growth strategy. The Acquisition represents a 304%. premium to PTSG shareholders who invested upon flotation in 2015, and a 141.5% premium to the most recent closing share price. The Independent Directors are recommending that PTSG shareholders vote in favour of the Acquisition.”
Adam Joseph, Senior Managing Director at Macquarie Principal Finance Europe, said: “We are pleased that the Independent Directors of PTSG are recommending this takeover offer. We view PTSG as a highly attractive leader in its chosen specialist markets, with a strong track record of performance and reputation for quality, value and safety. Health and safety is an increasingly key focus for businesses and PTSG’s expertise means it will continue to play a critical role in providing safe working environments which comply with regulations and other requirements. We see a strong opportunity to partner with the management team in continuing to grow the business in core and adjacent markets, both organically and via strategic acquisitions, which is why we have made this compelling offer to shareholders at an attractive premium.”
KPMG is acting as lead financial adviser to PTSG. Pinsent Masons LLP is acting as legal adviser to PTSG. Numis is acting as financial adviser, nominated adviser and broker to PTSG.
Rothschild & Co is acting as financial adviser to Bidco. Travers Smith LLP is acting as legal adviser to Bidco.
PTSG floated in 2015 and currently has a market capitalisation of £109m. The firm has been reporting strong organic and acquisitive growth in recent years. For the year ending 31 December 2018, the firm saw revenues reach £69.1m, which marks a 31% rise on the £52.9m achieved the year prior.
The group’s Electrical Services’ division reported the biggest increase in revenue, rising by 53% to £30.8m. It is now the largest division accounting for 45% of the overall revenue. During year, pre-tax profits also rose from £1.8m to £3.7m and PTSG’s gross profits increased by 29% from £27.1m to £35m.
Its most recent acquisition was Trinity in Exeter, which it completed for £10.8m. In March, the firm announced a £50m increase to its banking facilities and last month, PTSG announced it had seen a strong start to the year.
CEO Paul Teasdale was named the Yorkshire’s region’s Transformational Leader at last year’s TheBusinessDesk.com Yorkshire Leadership Awards. Entries are now open for this year’s Northern Leadership Awards, to be held in November.
