UK for sale: Teleradiology supplier Medica Group becomes latest private equity target as IK Partners submit £269m bid
- Offer of 212 pence per share has a 32% premium over Medica’s closing price on Friday
- Medica’s board backs the deal, which reflects the company’s “future growth potential.”
- Recent takeover attempts include John Wood, THG and Sureserve
Medica Group has become the latest London-listed company to become a target of private equity buyers after IK Partners made a £269m bid for the teleradiology provider.
The offer of 212 pence per share is at a 32 percent premium to Medica’s closing price on Friday and a 50 percent premium to the group’s volume-weighted average price over the six months to April 21.
Medica’s board of directors recommends that shareholders vote in favor of the deal, which would allow investors to realize stock value at a level that reflects “the company’s future growth potential.”
Medica stocks rose 32.5 percent to 212 pence in early trading on Monday, meaning they’re up 65.3 percent since listing in July 2018.
Teleradiology is the transmission and display of radiological images, such as CT scans and X-rays
The deal is the latest in a wave of takeover activity that has seen a growing number of UK listed companies delisted by buyers seeking cheap valuations.
Network International, Sureserve, THG and John Wood are the most recent private takeover targets in a trend that has only deepened in recent years.
Medica is an international provider of telemedicine services and a market leading provider of teleradiology in the UK and Ireland. In the UK and Ireland.
Teleradiology is the transmission and display of radiological images, such as CT scans and X-rays, at a location independent of where the patient is imaged.
London-headquartered IK Partners’ bidding company said Medica is a “high quality company” and that it has “a high degree of respect for the management team… and the strategy they have implemented.”
It added: ‘Medica represents an attractive investment opportunity to acquire a leading player in the global teleradiology and broader imaging diagnostics market.
“Medica has a longstanding reputation for superior quality of teleradiology reporting, a compelling and differentiated proposition for radiologists, strong customer advocacy, and consistent reliability of the services it offers.”
IK Partners believes that Medica would be “better able to reach its full potential in a private market environment enabled by accelerated investment in growth.”
Medica achieved a turnover of £77m in 2022, with an underlying operating profit of £13.6m slightly better than market expectations.
Analysts from Peel Hunt said last week: “We make no secret of the fact that we like the company, but we would like to see the group suspend dividends to invest in more advanced technology.”