Medica Group has become the latest London-listed business to become a target of private equity buyers after IK Partners tabled a £269million bid for the teleradiology provider.
The 212p per share bid is at a 32 per cent premium to Medica’s closing price on Friday and at a 50 per cent premium to the group’s volume-weighted average price over the six months to 21 April.
Medica’s board recommends shareholders vote in favour of the deal, which it said will allow investors to realise the value of shares at a level reflecting ‘the future growth potential of the business’.
Medica shares soared 32.5 per cent to 212p in early trading on Monday, meaning they have risen 65.3 per cent since listing in July 2018.
Teleradiology is the transmission and display of radiological images, such as CT scans and X-Rays
The deal is the latest in a flurry of takeover activity, with a growing number of UK-listed firms taken private by buyers eyeing cheap valuations.
Network International, Sureserve, THG and John Wood are the most recent targets of private takeovers in a trend that has only deepened over the last few years.
Medica is an international provider of telemedicine services and a market leading teleradiology provider in the UK and Ireland. In the UK and Ireland.
Teleradiology is the transmission and display of radiological images, such as CT scans and X-Rays, in a location independent of where the patient is imaged.
London-headquartered IK Partners’ bidding company said Medica is a ‘high-quality business’ and it has a ‘high degree of respect for the management team…and the strategy they have implemented’.
It added: ‘Medica represents a compelling investment opportunity to acquire a leading player in the global teleradiology and wider imaging diagnostics marketplace.
‘Medica has a long-standing reputation for superior quality of teleradiology reporting, a compelling and differentiated proposition for radiologists, strong customer advocacy and consistent reliability of the services that it offers.’
IK Partners believes Medica would be ‘better able to achieve its full potential in a private market setting enabled by the acceleration of investment in growth’.
Medica achieved revenues of £77million in 2022, with underlying operating profit marginally beating market expectations at £13.6million.
Analysts at Peel Hunt last week said: ‘We make no secret of the fact that we like the business, but we would like to see the group suspend the dividend in order to invest in more advanced technology.’
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