Wed, 01/02/2012 - 13:30
Fund administrator GlobeOp is to be acquired by private equity firm TPG Capital in a deal worth around GBP508 million (USD800 million).
The deal follows GlobeOp’s announcement on 6 January 2012 that it was carrying out a review of its ‘strategic options’ and will see Geo 3, a newly established partnership directly owned by TPG Partners VI-AIV, acquire 100 per cent of the ‘issued and to be issued share capital of GlobeOp’.
Under the terms of the Offer, GlobeOp Shareholders will be entitled to receive 435 pence in cash for each Ordinary Share held. The Offer Price represents a premium of approximately 48.5 per cent on the Closing Price per Ordinary Share of 293 pence on 5 January 2012 (being the last Business Day prior to GlobeOp’s announcement that it was in discussions with TPG).
According to a statement released by GlobeOp: “The Offer implies an attractive Enterprise Value multiple of approximately 11.0 times GlobeOp’s Adjusted Operating Profit for the 12 months ended 30 June 2011 and fully diluted equity value multiple of approximately 20.6 times GlobeOp’s net income for the 12 months ended 30 June 2011.
“The Independent Directors, who have been so advised by Evercore Partners, consider the terms of the Offer to be fair and reasonable. In providing advice to the Independent Directors, Evercore Partners has taken into account the commercial assessments of the Independent Directors. The Independent Directors intend to recommend unanimously that GlobeOp Shareholders accept the Offer, as the Management Team and GlobeOp Directors who hold Ordinary Shares have irrevocably undertaken to do (or have otherwise contracted to sell their shares to the Offeror conditional on the Offer being wholly unconditional) in respect of their entire beneficial holdings in GlobeOp amounting to in aggregate, 24,083,400 Ordinary Shares, representing approximately 22.82 per cent. of the existing issued share capital of GlobeOp.
“The Offeror has also received an irrevocable undertaking from TA Associates to accept the Offer, in respect of a total of 5,183,926 Ordinary Shares, representing approximately 4.91 per cent. of the entire share capital of GlobeOp.
“The Offeror has also obtained letters of intent to accept the Offer from Aberforth Partners LLP, Columbia Wanger Asset Management, LLC., Sageview Capital MGP, LLC and Standard Life Investments in respect of an aggregate total of 17,006,209 Ordinary Shares representing, in aggregate, approximately 16.11 per cent. of the entire issued share capital of GlobeOp.
“In aggregate, therefore, irrevocable undertakings to accept the Offer, letters of intent and agreements to sell pursuant to the Share Exchange Agreement and conditional on the Offer becoming wholly unconditional, have been received in respect of a total of 46,273,535 Ordinary Shares, representing approximately 43.85 per cent. of the entire share capital of GlobeOp. Further details of these irrevocable undertakings, letters of intent and the Share Exchange Agreement are set out in Appendix III to this announcement.
“The Offeror is an investment vehicle owned indirectly by the TPG Funds, which has been formed for the purposes of making the Offer. TPG is one of the most active private equity investors in financial technology companies. Over the last several years, it has sought to invest in well-positioned market leaders, similar to GlobeOp. Select investments in financial technology firms include Fidelity National Information Services, Lender Processing Services and Vertafore, all of which are market leaders in their respective sub-sectors. TPG also has a successful history of investing in the broader financial services sector, which gives it a deeper perspective into the buying needs of financial firms. Significant investment areas include: banking (Bank Thai, BTPN, EverBank, Saxo Bank, Shenzhen Development Bank, Taishin Holdings and VTB), asset management (American Beacon and LPL Financial Services), Insurance (ArielRE, Direct General, Endurance and ProSight) and specialty finance (AerFi, Shriram and Tygris).
“The Offer is subject to the conditions and further terms set out in Appendix I which include (i) valid acceptances of the Offer being received (and not, where permitted, withdrawn), or Ordinary Shares being otherwise acquired or contracted to acquire, in respect of not less than 90 per cent. (or such lesser percentage as the Offeror may decide in accordance with the Code) of (a) the capital carrying voting rights in GlobeOp and (b) the voting rights in GlobeOp, (ii) approvals and consents received from the FSA, the Central Bank of Ireland, the Cayman Islands Monetary Authority, and the Securities Commission of The Bahamas and an application being submitted to the Financial Industry Regulatory Authority in sufficient time, and (iii) the satisfaction of all merger control requirements under the laws of the United States and Cyprus.”
Ed Nicoll, Chairman of GlobeOp, says: “We welcome TPG’s Offer, which is the result of an extensive and competitive process over the last few months. We commenced the strategic review to ascertain whether there was an opportunity to create value for shareholders and we believe that this Offer achieves that aim. The Independent Directors believe that the Offer represents good value and an attractive balance between the future opportunities and risks facing the business and have therefore decided to recommend TPG’s Offer to shareholders.”
Bryan Taylor, Partner of TPG, says: “TPG is delighted to announce today’s formal offer for GlobeOp. GlobeOp is a strong global financial services company with a high quality offering and a robust business model, which we plan to invest in and grow. TPG is committed to enhancing GlobeOp’s position as a leading independent operator and to working with its customers, employees and management to continue the success of the Company.”
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