Blue Prism Group, the Warrington-based robotic process automation (RPA) software firm, said on Tuesday it has agreed to a takeover by US private equity firm Vista Equity for about £1.1 billion.
Blue Prism, whose customers include the NHS, Daimler, Fidelity and eBay, said it plans to recommend that shareholders vote in favour of the £11.25 per share cash bid, calling the terms “fair and reasonable.”
If the deal for Blue Prism goes through, Vista said it intends to “indirectly transfer” the business to TIBCO, a Vista portfolio company.
On its plans for the combined TIBCO and Blue Prism, Vista said: “Vista, like all private equity investors, will always assess options for its investments and intends to explore the potential sale of all or a portion of its equity interest in the combined group which may happen within the next 12 months.”
Blue Prism shares fell about 2.5% to around £11.59, indicating some investors were hoping for a higher offer.
However, Jefferies analysts said that as Blue Prism also downgraded its 2021 revenue outlook on Tuesday, that move “obviously creates a weak negotiating position to extract a high price.”
Blue Prism chairman and CEO Jason Kingdon said: “Blue Prism has become a leading player in the RPA sector since it was founded in 2001, when it first pioneered the technology.
“We have made excellent progress in creating a company with a robust global customer base and rapid revenue growth — rising from £6 million when we listed in 2015 to an expected reported revenue of over £160 million this year.
“Vista and TIBCO recognise the strength of what we have built and the exceptional products and services we provide our customers.
“This is testament to the hard work and dedication of all Blue Prism team members over the years.
“Combining with Vista and TIBCO will ensure we remain at the forefront of the next generation of intelligent automation: we can expand the range of products we offer our customers, with TIBCO’s global footprint and technologies; and, as a privately owned company, we will also have greater access to capital to pursue new growth opportunities via product investment and other potential M&A.”
Monti Saroya, senior managing director at Vista and co-head of the Vista Flagship Fund, said: “Vista is a leading investor in Robotic Process Automation technologies and views the acquisition of Blue Prism and combination with TIBCO as an exciting and transformational moment for the growth of enterprise-grade Intelligent Automation and Robotic Process Automation.
“We are pleased to extend this offer for Blue Prism and believe the combination will yield significant synergies and market differentiation, combining the product and R&D investment of the two businesses and enabling the marketing of a broader product offering to existing and new customers.”
AJ Bell investment director Russ Mould said: “A firm takeover offer has finally come for robotic process automation group Blue Prism and it’s less than the market anticipated, leading to a near -3% drop in the share price.
“A bid battle cannot be ruled out as the company admits it has received multiple proposals in recent months and, as we’ve seen with many other takeovers this year, once the first bid is made then other interested parties start to up their game.
“While considerable investment is required in the business, a would-be suitor taking a long-term view of the sector’s growth prospects might see Blue Prism as a cheaper way to get a foot in the door, given how its US-listed rivals have historically traded on much higher ratings.”