Laird PLC (LON:LRD) shares surged more than 74% after the British electronics and technology company agreed to be taken over by Advent International.
Laird shareholders will receive 200p in cash for each of their shares, valuing the business at around £1bn, or at £1.2bn including debt. The deal represents a 73% premium on Laird’s closing price of 115.9p on Wednesday.
Laird, which makes wireless communication equipment and technology for automated systems, said it considers the terms of the deal to be “fair and reasonable” and directors plan to recommend the deal to shareholders.
Advent said it has already secured support for the takeover from shareholders representing 27% of Laird’s shares. The deal needs approvals from shareholders of at least 75% of Laird.
Laird chairman Martin Read said Advent will provide stability for the company’s customers and other stakeholders.
"It has also stated its intentions to support Laird's employees and invest in the business as it moves to the next stage of its development," he said.
Laird swings to full year profit
Alongside the announcement, Laird reported pre-tax profit of £57mln in 2017, compared with a £122.4mln loss in 2016 as it made progress with its restructuring and implementing cost savings.
Revenue grew 17% to £936.6mln with growth across all its three operating divisions including, connected vehicle solutions, wireless-and-thermal systems and performance materials.
"Laird has made significant progress and delivered a much improved performance in 2017,” said chief executive Tony Quinlan.
“In my first year as CEO, we've simplified structures, enhanced the quality of the leadership and focussed on improving the efficiency and profitability of all Laird's operations. These actions have delivered much improved results, and have built strong foundations for the future."
In April Laird completed a £185mln rights issue that reduced debt and strengthened its financial position to take advantage of investment opportunities. Net debt fell by 52% to £164.4mln last year.
READ: Laird rights issue receives 95.5% take-up
Quinlan said he expects the company to see further improvements in its underlying financial performance this year with more cost savings, despite the negative impact of a weaker pound.
The company did not recommend a final dividend due to the takeover offer.