Gamma Communications accepts GBP1 billion takeover offer from Epiris
Gamma Communications PLC has accepted a takeover offer from Epiris GP III Ltd funds, Epris announced on Tuesday.
Gamma, a London-based cloud communications and voice services provider, had last month extended Epiris' put-up-or-shut-up deadline to Wednesday. London-based private equity firm Epiris LLP had initially considered a joint offer with Providence Equity Partners LLP, which dropped out in June.
Gamma shareholders, under the terms of Epiris's accepted offer, will be entitled to receive 1,120 pence in cash per share. This values its share capital at about £1.02 billion, with an implied enterprise value of approximately £1.08 billion.
Gamma shares were up 0.8% at 1,149.15 pence in London on Tuesday morning, giving the company a market capitalisation of £1.03 billion. This means Gamma's shares were trading above the Epiris offer price.
Epiris however noted that the offer represents a premium of 53% to Gamma's closing stock price on April 7, the last trading day before its offer period started.
"Epiris believes that it is well positioned to accelerate Gamma's transformation and development as a private company and to deliver the company's next phase of growth," the buyer said.
It highlighted Gamma's "broad range of business-critical communication technology solutions", its "leading market presence in the UK and Germany", and its "proven track record of delivering profitable organic growth and attractive cash generation".
"Whilst the historical level of organic growth has recently been more challenging to deliver, Epiris believes that product investments and a number of focused strategic initiatives will enable Gamma's organic growth to be accelerated," Epiris said.
It said that "through increased investments and a renewed strategic focus on innovation underpinned by greater AI adoption, there are significant opportunities for Gamma to accelerate its growth".
Gamma's directors "consider the terms of the acquisition to be fair and reasonable" and plan to unanimously recommend that shareholders vote in favour of the acquisition scheme of arrangement.
Epiris expects the deal to complete in the first half of 2027.
"Gamma has built a leading position in European business communications through sustained investment in its products, technology, people and customer relationships," commented Gamma Chair Martin Hellawell.
"The board remains confident in the company's strategy and long-term prospects.
"The board has nevertheless concluded that the acquisition provides Gamma shareholders with attractive and certain value in cash."
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