Brady plc thrown £8.3m lifeline via Hanover Bidco offer
Global investment house Hanover Bidco is buying Cambridge risk software technology business Brady plc for £8.3 million. It is also investing further significant amounts into modernising Brady’s existing products.
Both boards have agreed the deal which hands Brady stockholders 10p a share – a handsome premium to the start of the month when the shares hovered just above an all-time low.
The UK company neared rock bottom when it revealed it needed a £16.5m cash lifeline against a sunken market cap of £7.71m.
Hanover Bidco is an investment vehicle ultimately wholly owned by Hanover Active Equity Fund II, S.C.A. SICAV-RAIF.
The offer represents a premium of 50.8 per cent over the closing middle market price of 6.63 pence per Brady share on October 11.
Brady announced on September 26 that it was seeking an initial £1.5m to meet working capital requirements up to November 30 to support existing operations. It added that it would need a further £15m to meet longer-term requirements.
Hanover Bidco will now work with Brady’s management to agree a plan for modernising Brady's products and to seek to ensure that the products and services provided to customers are best in class. Hanover Bidco says it is prepared to commit significant funding to reach this objective.
Matthew Peacock, founding partner of Hanover Investors and a director of Hanover Bidco, said: “We are pleased to be announcing this recommended cash offer for Brady plc. While Brady enjoys an enviable market position we believe that the public market is unable to deliver the operational support and funding Brady requires to fulfil its potential.
“Hanover has successfully turned around several software businesses in a similar state of development and stands ready with the expertise and capital to drive growth and deliver best in class products and services to Brady's customers.”
Ian Jenks, Brady’s non-executive chairman added: “The recent period has been a challenging time for the company and the board's priority has been to secure an outcome for shareholders, customers and employees that preserves value and provides a platform from which the business can flourish.
“I believe the offer from Hanover provides certainty for all stakeholders along with the expertise and resources to best enable Brady to unlock its potential.”