Royal Ten Cate NV, has agreed to be bought by a group of private-equity firms for 675 million euros
Royal Ten Cate N.V. and Tennessee Acquisition B.V., a company controlled by a consortium of investors led by Gilde Buy Out Partners and also including Parcom Capital and ABN Amro Participaties. Tencate said in a statement that stockholders will receive €24.60 a share in cash, 27% above Fridays closing price.
The company reported its first loss since 2001 as an expected increase in defence revenue failed to appear. The company took an impairment charge on the armour business, Ten Cate said in February, as buyers postponed deliveries of vehicle armour.
Loek de Vries, President and Chief Executive Officer of TenCate, said:
This offer represents positive news for all stakeholders involved in our company. There is a clear commitment to support our strategy, which means we can invest in our product-market-technology combinations, thereby further strengthening our leading market positions. In addition, we can continue our buy and build approach and we will benefit from the capabilities, experience and financial support of our new shareholders.
According to data compiled by Bloomberg the bid values Ten Cate at about 11.3 times earnings before interest, tax, depreciation and amortisation over the past year, above the median of 9.8 times for similar deals.
Speaking with Bloomberg Joost van Beek, an analyst for Theodoor Gilissen Bankiers said;
The price is reasonable, but not fully knock-out, the buyers may not have been willing to pay more because they will need to keep investing in the company, where profitability has been disappointing for a while.
TenCate will seek to obtain all necessary governmental approvals and competition clearances as soon as practicable with the offer expected to commence in September or October 2015.