Robust Feb FY results may have sparked interest in firm currently still valued at IPO price
Companies: Exova Group
Shares in Exova opened up 13% on Monday after it emerged that the company has received three takeover offers in recent weeks, from Element Materials Technology, Jacobs Holding AG and PAI Partners SAS.
Bidders look to be trying to take the Edinburgh-based lab-testing specialist private, and follow rumours that Clayton Dubilier & Rice, the US private equity firm that is its majority shareholder, was keen to sell the business after an underwhelming couple of years on the FTSE.
Since listing in April 2014, Exova’s share price has had a mixed 2 years, falling 50% between 2014 and 2016, but regaining 95% since to be around its original listing price. During that time, revenues grew 19% from £275m to £329m, with consensus forecasting 5.4% growth in the next two years.
The company struggled following the commodities collapse, with O&G revenues falling from 17% of the total in 2014 to just 9% by 2017, however during this time the firm also saw stronger performance from other divisions, making O&G a smaller proportion of overall revenue.
These bids likely follow a robust set of FY numbers released in February, with revenue growth up 10.8%, EBITA up 7.8%, and further revenue growth in 2017.
Exova's Board said any deal would be dependent on due diligence and the recommendation of the Board, and said there was no certainty that any firm offer will be made by any of the Possible Offerors or the terms on which any offer might be made.