Shares in financial services firm IFG Group soared over 42% in Dublin today after it said it had agreed to a £206m takeover offer from UK private equity firm Epiris Funds.
The deal values IFG Group at 193 pence per share and sees the firm being taken over by a wholly-owned indirect subsidiary of Epiris.
IFG, which offers financial solutions through its UK-based units James Hay Partnership and Saunderson House, said this represents a 46% premium to its closing share price of £1.325 on March 22.
In a statement, the Dublin and London-listed company said the deal follows a comprehensive review of the many options available to IFG under a new management team.
"The Board has decided that a sale to Epiris is in the best interests of shareholders," it added.
The company's chief executive Kathryn Purves said the board believes the sale is "an excellent outcome" for shareholders, for the company and for its clients.
"The offer by Epiris represents a compelling opportunity for shareholders to realise an immediate and attractive cash value for their shareholding in IFG today," the CEO said.
"In addition, our employees and clients will benefit under the ownership of Epiris which should help accelerate the delivery of IFG’s strategic objectives and the underlying strategies of James Hay and Saunderson House," she added.
IFG also announced an increase in its revenues and operating profits for the year to the end of December.
The company said its revenue grew by 12% to £87.6m on the back of repricing and increases in the Bank of England interest rate in James Hay and a strong performance in Saunderson House.
It said its adjusted operating profit increased 18% to £12.4m, which it said demonstrated the strength of the underlying businesses.
IFG's operating profit (after exceptional costs and amortisation) came in at £0.3m, compared to a loss of £0.4m in 2017.
Commenting on today's all cash offer, Davy Stockbrokers said in a note that it removes uncertainty for shareholders.
However, Davy said the headline multiple of earnings is less eye-catching when considered in the context of projected earnings growth in the coming years.
"Underlying FY 2018 performance was marginally ahead, based on better revenue margins than forecast, albeit exceptional costs again weighed on headline performance," the stockbrokers added.
Shares in the company jumped in Dublin trade today.
