Private equity has acquired another British firm ravaged by the pandemic.
The US-based Providence Equity Partners has agreed to purchase event organizer Hyve for 108 pence per share, or £481 million.
The transaction increased the value of the company’s shares, which are traded on the London Stock Exchange, by 10.4%, or 10.4p, to 110p.
That was higher than Providence’s proposal, suggesting investors anticipate a competing offer.
However, it is still 80% below pre-Covid highs, fueling fears that British companies are being acquired by foreign predators at bargain prices in the aftermath of the pandemic.
During the Covid, “pandemic plunderers” sought to buy British companies at low rates.
In recent years, G4S, AA, Morrisons, and Ultra Electronics are among the companies that have been sold.
Danni Hewson, AJ Bell’s head of financial analysis, called the Hyve deal “another British bargain” for private equity.
She stated, “Hyve is perfectly positioned for real growth, but with money becoming more expensive, it’s probably not surprising that it has sought out a sure bet to help it expand further and more quickly than it would have otherwise.”
‘The board demanded a fair price for the company in today’s tough economy. But a fair deal today appears cheap when compared to the company’s past performance.’
The purchase could net Hyve founder and CEO Mark Shashoua £1.2 million from his unvested shares.
Several Hyve directors and the company’s largest investor, Strategic Value Partners, have already supported the transaction, granting Providence the support of shareholders who control just under 17 percent of the company’s voting rights.
Richard Last, the chairman of Hyve, stated, “The board believes the offer represents value for shareholders and that Providence, with their sector expertise and confidence in the business and management team, will be a good partner for Hyve.”
The London Stock Exchange would delist the company in May if shareholders accept the transaction.
Formerly known as International Trade Exhibitions, Hyve was founded in 1991 by the Shashoua family. Who hoped to capitalize on the transition of former Soviet Union states to market economies.
After selling some of its global enterprises over the past year. Almost all of its exhibitions now occur in advanced economies.
However, Hyve shares have not recovered since the £900 billion events industry was halted at the beginning of the pandemic.
This was exacerbated by the conflict in Ukraine and Hyve’s subsequent decision to abandon its Russian business.
Revenues for the year ending September 2022 were 90% of pre-Covid levels, with the second half at 110 percent.
The US private equity firm stated, “Providence believes that Hyve has established a strong platform for future organic and inorganic growth, supported by Hyve’s portfolio of high-quality global brands and market-leading events focused on developed markets and growing sectors.”
Providence owns a majority stake in New York-listed software firm Double Verify and Real Madrid’s franchise subsidiary.
