(News Bulletin 247) – The Bridgepoint investment fund, associated with the General Atlantic fund and the managers, will launch a public takeover bid for the specialist in the dematerialization of administrative management documents at a price of 262 euros per share.

Announcements of public offers targeting companies listed on the Paris Stock Exchange are coming thick and fast this Friday, such as the one launched on SQLI by its reference shareholder.

The dematerialization software specialist Esker is not to be outdone. The latter has finally yielded to the advances of the British fund Bridgepoint, which has joined forces with the General Atlantic fund and the managers to realize this public purchase offer on the Lyon group.

Brought together under the company Boréal Bidco, this consortium of investors intends to formulate its offer at a price of 262 euros per share, which represents a premium of 11% on the last price quoted on Thursday evening, i.e. 235 euros.

Not a surprise

On the Paris Stock Exchange, the Lyon group’s share price is currently up 11% to 261.20 euros, to settle close to this price of 262 euros.

This announcement does not really come as a surprise. In early August, Bloomberg had indicated that Bridgepoint was interested in Esker and that it was considering a public offer for the Lyon group. Esker then confirmed that it had been in contact with the investment fund Bridgepoint “regarding a possible offer”.

Since this information, the stock had risen by 15% compared to the price prior to these rumors, namely 201.40 euros on August 8. This explains the moderate increase in the stock this Friday, after the announcement of the acquisition project by the Bridgepoint fund associated with the General Atlantic fund and the managers. Restated for this stock market movement, the proposed price of 262 euros reflects a premium of 30.1% compared to the last price not affected by market rumors and 43.6% compared to the weighted average price of the six months preceding the first market rumors.

Esker said the offer values ​​100% of the capital at approximately €1.621 billion, on a fully diluted basis. The transaction values ​​Esker at €1.57 billion in enterprise value, resulting in “generous multiples” of 7.7 times expected revenue and 61 times expected operating profit for 2024, according to the Factset consensus cited by Invest Securities.

Esker’s supervisory board “welcomed the principle of the offer”, pending the opinion of the social and economic committee and the report of the independent expert who will be appointed in the coming days.

Its success remains conditional on obtaining more than 60% of the capital and voting rights, and the takeover bid would be declared null and void otherwise. The initiator intends to implement a mandatory withdrawal procedure in the event of exceeding the regulatory threshold of 90%.

Regarding the indicative timetable, the initiator plans to launch its offer during the fourth quarter of 2024 and hopes to close it by the end of 2024, or at the latest during the first quarter of 2025, “subject to the prior obtaining of the required merger control authorisations”.

Have more room to maneuver

The stock market no longer seems to be of major interest in carrying out Esker’s growth strategy. Questioned by Les Echos, Esker’s management justified this choice by the fact that listing on the stock market complicates the growth strategy, specifying that shareholders rejected a resolution in the spring proposing to raise more than 12% of the capital. “This prevented the group from making a structuring acquisition,” underline the analysts at Invest Securities.

Alongside this announcement, Esker also revealed solid half-year results, but which have been “second-rate” as Jean-Pierre Tabart, analyst at TP ICAP Midcap, rightly predicted.

For a turnover up 13%, the company revealed an operating result up 30% to 12.7 million euros, which is above the 11.9 million euros projected by the analyst. The operating margin thus progressed by 1.7 points to 12.8%, at the top of the annual target range (12% to 13%), while the net result progressed by 25% to 9.3 million euros.

Alongside this publication, management maintained its revenue growth forecasts for 2024. It still expects revenue growth of 12% to 14% (excluding acquisitions and currency effects) for the whole of 2024.

Listed actors who are becoming rare

The company is, in fact, taking advantage of a regulatory change on the generalization of electronic invoices in France. “Electronic invoicing, already mandatory in the context of public procurement since January 1, 2020 for all companies, will gradually be extended to exchanges between companies (and associations) subject to VAT, established in France”, explains francenum.gouv.fr, the portal for the digital transformation of companies.

This robustness of the small ETI from Lyon thus caught the eye of Bridgepoint, which did not want to see this nugget escape it, especially since listed players in the software publishing sector are starting to become rare. At the beginning of the year, the Swedish Pagero fell into the hands of Thomson Reuters, which acquired 53.81% of the capital of the company specializing in electronic invoicing and tax solutions. Thomson Reuters even raised its takeover bid by 25% to be sure of winning the stake and thus ousting the other contenders for the acquisition of the Swedish group.

A possibility that is raised by TP ICAP. “The question will be whether this takeover bid will push a third party to present a higher offer,” wonders the design office.

But for Oddo BHF analysts, nothing is decided yet: “At first glance, the speculative pattern could continue on the stock to the extent that the financial attractiveness of the offer appears questionable at this price, and probably insufficient to secure the squeeze-out (the exit from the listing, Editor’s note) at this stage”, they suggest.