Ergomed stock jumps 30% on Permira offer

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on Sep 4, 2023
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  • Permira says it will buy Ergomed PLC for about £703.1 million.
  • Ergomed had recently reported a 10% growth in its H1 revenue.
  • Ergomed stock has now returned to the price at which it started 2023.

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Shares of Ergomed PLC (LON: ERGO) jumped nearly 30% on Monday after Permira said it will buy the biopharmaceutical services company for about £703.1 million ($886.40 million).  

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Permira offer values Ergomed stock at a premium

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The cash deal that Permira – a European private equity firm announced this morning values each share of Ergomed at £13.50.

Ergomed has a workforce of about 1,800 people across 100 countries. Its Chairman Miroslav Reljanovic said today in a press release:

Private ownership by funds advised by Permira, a highly-experienced healthcare investor with track record of building successful businesses, will allow us to build on foundations we have created.

In July, the London-listed firm reported a 10% annualised growth in its revenue for the first six months of this year. Ergomed stock has now returned to the price at which it started 2023.

What does Permira has in store for Ergomed?

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On Monday, Permira also said that it will invest in technological transformation and commercial expansion of the British company. According to Chairman Reljanovic of Ergomed PLC:

It [deal with Permira] also brings with it opportunities to access their operational expertise, global network and capital.

Note that the private equity firm has also proposed a different offer that promises 451 pence a share in cash and the remaining in unlisted securities. But Ergomed’s board refrained from making recommendations on the alternative offer today.

Ergomed stock will leave the London Stock Exchange once this transaction is complete. The stock market news arrives shortly after Dechra – another British healthcare company was taken private by EQT in a £4.46 billion deal.

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