Blue Prism shares sink as tech firm agrees £1.1bn private equity bid

Blue Prism shares drop back as bid war chances recede: UK tech firm’s board agrees £1.1bn takeover bid from US private equity firm Vista

  • Blue Prism board recommends shareholders vote in favour of 1,125p per share offer
  • The firm is the latest UK listed entity targeted by a US private equity firm
  •  Blue Prism share fall 2.9 per cent to 1,155p in early trading after announcement 

UK tech firm Blue Prism has agreed to an acquisition offer worth £1.1billion from US private equity firm Vista Equity Partners.

The multinational software corporation, which counts eBay and the NHS among its customers, told shareholders on Tuesday they should vote in favour of the bid worth 1,125p per share.

At the time of the initial approach in August that was a premium of more than 35 per cent to the stock’s price. But reports of the agreement saw Blue Prism shares sink 2.9 per cent to 1,155p in early trading, as it lessened the chances of a bidding war escalating.

The firm was also previously in talks with TPG Capital over a possible offer. 

The Blue Prism board told shareholders on Tuesday they should vote in favour of the bid worth 1,125p per share

Institutional investors Jupiter Investment Management and Lead Edge Capital Management, in addition to Blue Prism’s co-founders, have confirmed they intend to vote in favour of the acquisition.

Blue Prism has become the latest UK-listed firm to become the target of US private equity investors in recent weeks, with rival bids for Morrison’s another recent example.  

Blue Prism highlighted the ‘strategic and operational headwinds facing the company’, revealing that it has ‘received multiple non-binding proposals to acquire the company over the last four months’’

‘After careful consideration and having evaluated all options, the Blue Prism Board has determined that the [Vista] acquisition is in the best interests of Blue Prism Shareholders, immediately delivering certain value without the execution risks associated with the necessary strategic investments envisaged,’ the firm told shareholders.

As part of a broader strategic review, Blue Prism has also opted to separate its chair and CEO roles, the latter of which it has began a search for the new occupant of.

It said: ‘The Blue Prism board is confident in its ability to attract an experienced international software business leader to take up the role of CEO, it is clear that delivering on the strategy will require considerable continued investment in both product development and go-to-market activities.

‘It may also take considerable time for a new CEO to implement a new operational strategy in a fast-evolving competitive market.’

Chair and CEO of Blue Prism Jason Kingdon

Chair and CEO of Blue Prism Jason Kingdon

Commenting on the acquisition, chair and current CEO of Blue Prism Jason Kingdon said Vista recognises ‘the strength of what we have built and the exceptional products and services we provide our customers’.

He added: ‘Combining with Vista…will ensure we remain at the forefront of the next generation of intelligent automation.

‘We can expand the range of products we offer our customers…and, as a privately owned company, we will also have greater access to capital to pursue new growth opportunities via product investment and other potential M&A.’

Senior managing director at Vista and co-head of the Vista Flagship Fund Monti Saroya said the tie-up will ‘yield significant synergies and market differentiation, combining the product and R&D investment of the two businesses and enabling the marketing of a broader product offering to existing and new customers.’