Radiology firm Medica is latest target of private equity

The private equity sweep on the London Stock Exchange does not appear to be abating after a radiology company was the last to receive an offer yesterday.

London-based private equity vehicle IK Partners has made a £269m bid for Medica, which provides services to NHS radiology departments.

Takeover fever has plagued the City in recent weeks as private equity firms have hunted for cheap deals.

There are also concerns that the London market is losing its appeal to businesses as many look to New York offerings.

Medica’s board of directors has urged shareholders to support the acquisition, which would allow investors to realize their shares “at a value that reflects the company’s future growth potential.”

Freer believes Medica will be “better able to reach its full potential in a private market environment.” At 221 pence per share, the offer represents a 32 percent premium to Medica’s closing price on Friday.

And shares of the East Sussex-based company rose 33.8 percent, or 54 pence, to 214 pence.

Founded in 1989, IK Partners has a track record of investing in healthcare companies, with a portfolio spanning across Europe.

Medica posted a 12 percent profit increase last month, which could explain why it was an attractive option for a private deal, the analyst added.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the latest foray into private equity was “new evidence” that British companies were seen as bargains.

British assets have been “weighed down by the weaker pound and the stagnant British economy,” and a wave of private equity activity could gain further momentum during the year, Streeter said.