LONDON: Veritas Capital has agreed to acquire British engineering firm Bodycote plc in a recommended cash deal valued at approximately £1.65 billion, the companies announced Monday.
The New York-based private equity firm will pay 940 pence per Bodycote share through its newly formed acquisition vehicle, Vulcan Alpha Bidco Limited. The offer comprises 932.8 pence in cash plus a 7.2 pence interim dividend for fiscal year 2026, which shareholders may retain.
The offer represents a 37.5% premium to Bodycote’s volume-weighted average share price for the three months ended May 21, prior to press speculation about a potential deal, and a 42.5% premium to the 12-month average.
Bodycote’s board unanimously recommended the offer after what it described as a competitive process that also involved CVC Capital Partners.
CVC had submitted a proposal of 915 pence per share on Aug. 5, one penny higher than Veritas’s initial bid of 914 pence, according to company statements at the time .
The competing approaches followed an earlier unsolicited proposal from Apollo Global Management in May, which later withdrew .
Bodycote, based in Macclesfield, England, is the world’s largest provider of heat treatment and specialist thermal processing services, operating approximately 130 facilities across 22 countries with about 4,000 employees. The company serves aerospace, defense, automotive, energy and general industrial markets.
Veritas, which manages approximately $54 billion in assets, said it intends to support Bodycote’s management in accelerating the company’s strategic plan while operating as a private entity with a longer-term investment horizon.
The acquisition will be implemented through a court-sanctioned scheme of arrangement under Part 26 of the UK Companies Act 2006, requiring approval from shareholders representing at least 75% of the value of those voting at a court meeting, as well as a separate general meeting.
The deal is subject to competition and regulatory clearances and is expected to close in the first quarter of 2027.
Barclays, Goldman Sachs and Gleacher Shacklock are advising Bodycote’s board. Gleacher Shacklock is providing independent financial advice under UK takeover rules.
Daniel Dayan, Chair of Bodycote, said: “The Bodycote Board believes that this offer from Veritas reflects the high quality of Bodycote’s business and management, and delivers shareholders excellent value in cash. The Bodycote team has worked extremely hard over many years to build a leading position in our industry, including recent success in delivering on the Optimise, Perform and Grow initiatives; accordingly the Board wishes to express its thanks to management and employees on behalf of shareholders. It is gratifying to see Veritas’ strong support in this announcement for Bodycote’s strategy in focusing the group on its most attractive markets for the benefit of all stakeholders. Veritas is an experienced and knowledgeable owner of industrial businesses with the capability to accelerate the delivery of this strategy. The Board remains highly confident in Bodycote’s prospects and believes that this offer recognises that value today and is therefore recommending it to shareholders.”
James Dimitri, Partner & Co-Head of Flagship Private Equity at Veritas, said: “Bodycote has established itself as a global leader in providing essential technologies for performance metallurgy across a range of mission-critical end markets. We admire what Bodycote and its talented employee base have built, and we look forward to leveraging our deep sector experience and track record of partnering with leading companies in the performance industrial supply chain to support Bodycote’s continued development and unlock a new chapter of growth.”
