INSURANCE technology firm Innovation Group has agreed to a £500m offer from Carlyle Group, and recommended that its shareholders vote in favour of the takeover.
Shares in Innovation Group, which specialises in claims services, went up by 2.58 per cent following yesterday’s announcement.
Carlyle-owned Axios Bidco has offered 40p per share for the firm, representing a premium of around 13.5 per cent to the closing price on 27 August.
George O’Connor, analyst at Panmure Gordon, said the offer undervalues Innovation Group. However, he added that “investors are likely to take this bird in the hand… given the management uncertainty at Innovation”, in reference to the planned retirement of the chairman and the imminent departure of chief executive Andy Roberts.
The analyst also highlighted a lack of clarity around the outlook for Innovation Group’s two divisions, business services and software.
O’Connor added: “There is of course always the opportunity of another bidder – although the two divisions are unlikely to be of interest to the mainstay of trade buyers.”
Carlyle managing director Eric Kump said Innovation has “great potential for growth, both organically and through acquisitions”.
Meanwhile, Innovation Group’s non-exec chair David Thorpe said: “Carlyle’s offer represents a compelling opportunity for Innovation’s shareholders to immediately and fully realise the value from their investment.”