Bain Capital Private Equity has confirmed that it may launch a takeover offer for Edinburgh-based software company Craneware.
The announcement to the stock exchange prompted a rise in AIM-quoted Craneware’s shares which closed 160p (7.8%) higher at 2210p, valuing the company at about £790 million as speculation mounted of rival bids.
Craneware’s head office is in Canon Mills, but all of its business is in the US healthcare market, providing software packages to improve operational efficiency.
Bain said it had noted the recent share price movement for Craneware, and “speculation” about a potential offer.
“Bain Capital confirms that the Bain Capital Funds are assessing a possible offer to acquire the issued and to be issued share capital of Craneware,” the US firm said.
“This evaluation is highly preliminary in nature, and has not to date involved any approach to the board of Craneware.”
Bain has until 5pm on 13 June to either announce a firm intention to make an offer or confirm that it does not intend to do so.
An hour ahead of the market closing, the board of Craneware issued a statement saying it “notes the announcement by Bain Capital Private Equity (Europe), that it is assessing a possible offer for Craneware. The board of Craneware confirms that no proposal has been received from Bain Capital.”
Analysts at Panmure Liberum said: “This evaluation is highly preliminary in nature and has not to date involved any approach to the board.
‘So, this is a bit unusual in terms of the stage of any discussions. However, we have argued for some time that Craneware is a bid target as it would be an attractive way to buy a strongly positioned US healthcare software provider.
“We think there could be several interested parties if this was to proceed. We believe our target price of 2750p is sensible given the growth and margin potential of the business, plus other relevant transactions. While this is clearly very early in any process, we retain our Buy rating and 2750p target price.”
Liontrust, the asset manager, is Craneware’s largest shareholder, with about 10% while co-founders Keith Neilson and Gordon Craig have 8.69% and 5.8% respectively.
Adjusted profit before tax for the six months to the end of December rose 21% to $20.6m on a 10% rise in group revenue to $100m.
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