US private equity firm pulls out of making an offer for GB Group

GB Group

US private equity firm GTCR has decided not to bid for Chester-based identity verification specialist GB Group.

It confirmed today, ahead of its deadline to launch an official approach, that it was no longer interested in acquiring the business as part of a cash bid.

Shares in GB Group rose 10% when the potential approach was first revealed on September 6. They fell more than 20% today after GTCR made its announcement.

The GBG Board said it had early-stage discussions with GTCR in respect of a possible offer, but agreement could not be reached on terms.

In response to today’s announcement, the board said it believes the company has a long runway of sustainable growth opportunities underpinned by supportive structural drivers such as digitalisation and an ever-increasing need to protect against fraud.

It added: “The wide-ranging capabilities GBG has developed and acquired over recent years give it a leadership position in the identity verification and fraud markets and reinforce its position as one of the largest pure-play identity software solution providers globally.

“GBG is focused on achieving its strategic and financial objectives in FY23 and beyond, and the board believes the delivery of these objectives will create significant value for GBG’s shareholders over time.”

Alasdair Young, an analyst with broker Panmure Gordon, said GB Group is now an attractive Buy stock: “With the shares now only seven per cent higher than they were before press speculation about the bid emerged, we see this as an attractive entry point for one of the UK’s best software assets.

“Moreover, we highlight that in the absence of a sale, current holders will benefit from the anticipated acceleration/expansion of growth and margins as Acuant becomes fully integrated and the revenue base becomes increasingly US-weighted.”