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Premier Technical skyrockets on Macquarie offer

As the testing and compliance specialist looks to continue its acquisitive growth strategy, it is recommending shareholders accept an “attractive” takeover offer from Macquarie
June 20, 2019

Premier Technical Services Group (PTSG) has reached an agreement to be acquired by a subsidiary of Australian investment bank Macquarie. Under the terms of the all-cash offer – which values the group at around £265m – shareholders will receive 210.1p a share. This represents a staggering 142 per cent premium to the 87p closing price on 19 June and is 304 per cent higher than the 52p listing price in 2015.

IC TIP: Hold at 208p

According to Chairman John Foley, “Macquarie's deep access to funding will better position PTSG to continue with its acquisitive growth strategy.” Even before listing in 2015, the group sought to supplement organic growth, consolidating the fragmented niche specialist testing and compliance markets in which it operates. As it now pursues larger “transformational” acquisitions, an increasingly competitive marketplace has driven the need to fund deals effectively and complete them more quickly.

The offer will be put to shareholders next month, with the independent directors unanimously recommending investors “realise compelling value in cash today rather than…waiting to realise the value of their investment”. Subject to at least 75 per cent of shareholders granting approval, the deal is expected to be completed by the end of July.

Chief executive Paul Teasdale and managing director Roger Teasdale will remain in their current positions but will reinvest the proceeds from the sale of a proportion of their holdings in the group – £16.3m and £1.81m, respectively. The final dividend of 0.9p for FY2018 agreed at the recent AGM remains intact.