LONDON: British software firm Idox plc said on Tuesday it had agreed to a recommended cash acquisition by Frankel UK Bidco Limited, a vehicle indirectly owned by U.S. investment manager Long Path, valuing the company at approximately £339.5 million ($[Insert approximate USD equivalent]).
Under the terms of the deal, Idox shareholders will receive 71.5 pence in cash for each share, a premium of 26.8% to the stock’s closing price on Oct. 27, the last business day before the announcement.
The Idox board, which was advised by Rothschild & Co, unanimously recommended the offer, stating it allows shareholders to “fully crystallise the value of their holdings in cash today.”
Long Path, a existing shareholder with a roughly 12% stake in Idox, believes taking the company private will benefit all stakeholders. The investor stated that private ownership would allow Idox to invest more heavily in product development and artificial intelligence, freeing management from the short-term demands of public markets.
“Operating as a private company, Idox would be well-positioned to invest in product and technology to satisfy evolving customer demands and drive organic growth while positioning the company for long term success,” Long Path said in a statement.
Idox, which provides specialised software for public sector and engineering clients, has seen its share price trade in a narrow range in recent years despite growth. The company said revenue for the financial year ending Oct. 31, 2025, is expected to be slightly below prior expectations, though profitability and net debt are anticipated to be in line.
The acquisition, which will be implemented via a court-sanctioned scheme of arrangement, has already received support from key shareholders. Bidco has secured irrevocable undertakings and non-binding letters of intent in respect of approximately 22.97% of Idox’s existing share capital. When combined with Long Path’s existing holding, this brings the total support to approximately 35.29%.
The transaction represents an enterprise value multiple of about 21 times core earnings (Cash EBITDA) and 21 times operating profit (EBIT) based on 2024 figures, which the Idox board described as an attractive valuation.
Commenting on this announcement, Chris Stone, the Chair of Idox, said: “The Bidco offer recognises the work undertaken by the Board, Management and employees of the Idox business and provides Idox Shareholders with an attractive, certain value in cash today that reflects the quality of our business and its people. While we remain confident in Idox’s standalone prospects, the Board also notes Bidco’s plans to invest in Idox’s product suite and intentions to support continued investment in the business. Following careful consideration, as a board we have unanimously concluded that the Acquisition is in the interests of our key stakeholders.”
Commenting on this announcement, Brian Nelson, Partner and Portfolio Manager of Long Path, said: “We are thrilled to partner with the Idox team to steer the company through its next phase of growth. As long-time shareholders of the business in the public markets, we have long admired the business and the team’s execution. Idox has demonstrated a remarkable ability to deliver world class, mission-critical software solutions to government and commercial customers in the UK and around the world. In our view, Idox’s public listing no longer best serves the company’s long term development prospects. Our partnership is built on a shared belief in Idox’s people, products, and purpose. Together, we will accelerate investment in product and innovation, enhance the customer experience, and strengthen Idox’s position as a leader in delivering critical digital infrastructure.”