FTSE 250 specialist engineering firm Bodycote (LON:BOY) confirmed it had received an approach from a private equity buyer. The proposal from US firm Apollo Management values the firm at just over $2 billion or £1.5 billion
29% premium
The firm, which provides thermal processing services, said the Apollo offer comprises 885p per share in cash plus the 16.1p final dividend. The offer is the latest in a series of proposals from Apollo to the Bodycote board, apparently.
Bodycote shares jumped 18% to 825p on confirmation of the approach. The offer represents a 29% premium to the undisturbed share price.
The group turned over £727 million last year, so the take-out price is around two times sales. Adjusted operating profit was £114 million, down on FY24 due to ‘challenging’ automotive and industrial markets.
Bodycote shares have traded sideways for the last decade, if not more, with a floor around 450p and ceiling around £10. Meanwhile, earnings per share have gone from 35p to 44p which is a CAGR (compound annual growth rate) of less than 2.5%.
That’s unimpressive by any standard, so no wonder the firm appointed a new CEO in 2024 and is rethinking its strategy. The company said it was executing its ‘Optimise, Perform & Grow’ plan at pace, but it would appear it’s too little too late.
