US private equity firm Veritas Capital has agreed to acquire UK-listed engineering specialist Bodycote for approximately £1.65bn, after increasing its offer to move ahead of rival bidder CVC Advisers, according to a report by Bloomberg.
Veritas will pay 940 pence in cash for each Bodycote share under the recommended transaction, while the inclusion of debt takes the enterprise value of the deal to around £1.85bn.
The latest proposal represents an increase on the offers previously tabled by both Veritas and CVC. However, the auction may not yet be over, with CVC saying it is evaluating its options and advising Bodycote shareholders to take no action for the time being.
Bodycote shares climbed as much as 4.4% following the announcement, trading above Veritas’ offer price as investors appeared to anticipate a possible further bid from CVC. The stock has gained more than a third since the beginning of the year.
Bodycote provides heat treatment and surface coating services for metal components, with customers across industries including aerospace. Its processes are designed to improve the durability of components and their resistance to extreme temperatures and wear.
Lazard is advising Veritas on the Bodycote transaction, while Bodycote has appointed Barclays, Goldman Sachs, Gleacher Shacklock and Jefferies as advisers.
