BT yesterday announced its biggest acquisition in more than four years, agreeing to buy legal IT services firm Tikit for £64.2m in cash.
The deal, made through the telecoms giant’s retail division, will allow BT to sell its own IT communications services to Tikit’s clients, which include more than 90 of the UK’s top 100 law firms.
Tikit said it would recommend the offer to shareholders, who will receive an 18 per cent premium on the company’s share price before the deal was announced, and 29 per cent up on the six-month average.
The joint statement from BT and Tikit yesterday sent the IT firm’s shares up 16.5 per cent.
BT’s head of retail Gavin Patterson said: “Tikit represents a highly complementary fit with BT Retail’s existing IT strategy and strengthens our position in the provision of ICT services to legal firms in the UK.
“The Offer will enable us to combine Tikit’s expertise, portfolio, relationships and deep understanding of the legal sector with BT Retail’s scale and breadth of products.”
Tikit will now hold a general meeting, with the deal expected to be completed by 18 January.
The move is a rare acquisition for BT, which has not made a purchase of this size since it bought conferencing specialists Wire One Holdings in May 2008.
BANK OF AMERICA MERILL LYNCH
IAN Ferguson, the managing director of the UK investment arm of Bank of America Merrill Lynch, was the head adviser to BT on its £64m agreement to buy Tikit.
Prior to working at Bank of America, Ferguson was a senior managing director at Evercore Partners for several years, joining the company five years ago as it set up its European business. Ferguson made a return of sorts to Bank of America Merrill Lynch in March after having worked for Merrill Lynch as managing director and European head of defence and aerospace before he joined Evercore. Ferguson previously advised aviation giant EADS on its collapsed mega-merger with BAE Systems. The £30bn deal was called off last month after failing to win German government backing. He had previously worked on EADS’s buyout of BAE’s Airbus stake. Ferguson, who joined Bank of America Merrill Lynch in March, also advised Martin Sorrell’s advertising giant WPP as it recently redomiciled to the UK after moving to Ireland partly thanks to its favourable corporation tax situation. Ferguson worked with Paul Bundred, the bank’s director of UK investment banking, and Ken McLaren, the managing director of EMEA mergers and acquisitions, on the deal.
Tikit was advised by Investec on the deal that values the company at 18 per cent above Tuesday’s closing share price.
Investec’s director of investment banking for technology, media and telecoms Andrew Pinder was Tikit’s lead adviser on the deal, working with associate Junya Iwamoto and broker Carlton Nelson. Pinder has a strong technology background having previously worked at Soundview Technology Group and Dresdner Kleinwort Benson.