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EG Solutions plc: THE INVESTMENT CASE

EG Solutions set to be taken over by US data analytics giant Verint in £26mln deal

The EG board has recommended Verint’s offer of 112.5p a share
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INVESTMENT OVERVIEW: EGS The Big Picture
Verint said it will leverage its global footprint to take EG to the next level

EG Solutions plc (LON:EGS) is set to be taken over by US data analytics giant Verint Systems Inc (NASDAQ: VRNT) after the back-office workforce optimisation specialist’s board accepted a £26.3mln offer.

That works out at 112.5p a share; a 53% premium to the average price of 73.5p over the past six months but 11% below yesterday’s close of 126.5p. In late afternoon trading, EG shares were changing hands at 110.5p each, down 12.7%, or 16p on the day.

EG Solutions said it had decided to recommend the offer as it was an “attractive exit price”, adding that it believes  there have only been a handful of trades at or above 112.5p in the last decade.

“I am pleased to recommend this offer to our shareholders,” said non-executive chairman Nigel Payne.

[The offer] is an attractive exit price when viewed against the fundamentals of the business, against the way comparable small technology companies are currently valued by the market and importantly against what we believe was the last institutional price at which EG's shares traded, which was on 23 May 2017 at a price of 71.7 pence, some 40.8 pence (35%) below the offer price.”

READ: eg solutions hails new five-year deal worth at least £8mln

Verint said it had already received irrevocable undertakings from shareholders representing just shy of 70% of the share capital. It needs to get 75% for the offer to become unconditional.

As for its future plans for its new addition, the NASDAQ-listed group – which has a market value in excess of £1.7bn (US$2.3bn) – said it would keep the EG brand for the time being although it would phase it out further down the line.

Verint expects to keep on most of the current staff  but the existing board of directors will all resign except for chief executive and founder Elizabeth Gooch who will stay on in a consultancy role.

She will remain in that position for an ‘interim period’ and will receive £22,500 a month for overseeing the integration of EG with Verint.

The deal is expected to close in November this year.

 -- Updates share price --

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