Bain Capital has said it will not be pursuing a takeover offer for Scotland-based software giant Craneware after its board rejected a proposal valuing it at just under £1 billion.
Bain had indicated its interest in a possible offer for Craneware on 16 May. It was given a deadline of 5pm this Friday to make its intentions clear towards the Edinburgh company which produces software for the US healthcare market.
In a statement today Bain said it “confirms that it does not intend to make a firm offer for Craneware”, though it said it may revive its interest, with the agreement of the Craneware board, if there is a rival offer.
The board of Craneware later issued a statement saying it rejected a proposal from Bain Capital that valued Craneware at 2650p per share, valuing the company at £940m, sharply higher than last night’s close of £720m.
Craneware said this was “a price which the board believes fundamentally undervalues Craneware and its prospects. The proposal was received without the parties entering into a due diligence process.”
It added: “The board is fully confident in the ongoing execution of Craneware’s strategy and that its continued successful delivery will create significant value for shareholders.
“The board believes that the proposal received from Bain is not in the best interest of shareholders and is not consistent with the board’s understanding of the objectives of shareholders.”
It said it believes the company’s share price performance over the last 12 months “is not reflective of the company’s trading performance and the continued improving prospects of the business, instead reflecting non-Craneware specific market factors.”
Trading in the year to 30 June 2025 has been strong, it said, with continued growth in revenue and adjusted EBITDA, and further Earnings, ARR and NRR acceleration.
Shares in the Aim-quoted business fell 1.72% ahead of this morning’s announcement, valuing the company at £720m and swung sharply during today’s session. After briefly rising above yesterday’s close, they closed 15p (0.75%) lower at 1990p, valuing the company at £718m.
Craneware, based in Canon Mills, was founded by Keith Neilson and Gordon Craig in 1999. Mr Neilson is one of the longest-serving CEOs of a publicly-quoted company.
Commenting on today’s developments, analysts at Panmure Liberum said: “The 7.00am RNS that confirmed Bain were not going to make an offer was far less interesting than the 7.49am RNS from Craneware.
“Our initial thoughts focused on the highly preliminary nature of the May announcement. At that stage Bain had not even been in contact with the board of Craneware.
“However, the later release today confirms that the board had in fact rejected a 2650p proposal. The board clearly believes the business fundamentals are improving, and the founder/CEO is the second biggest shareholder.
“This is supported by the company confirming that revenue has continued to grow and earnings, ARR and NRR have accelerated further. We continue to see the company as a bid target despite today’s news and retain our Buy rating and 2750p target price.”
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