Laboratory testing company Intertek has agreed a £9.5 billion takeover by Swedish investor EQT, marking the latest deal that sees a British firm fall into foreign hands.
Deal Details
London-listed Intertek has accepted a £61.08-a-share bid from EQT, ending weeks of talks between the pair. Intertek had previously rebuffed three proposals from EQT worth £51.50, £54 and £58 a share. The deal values Intertek at £9.5 billion, or £10.9 billion including debts, and represents a 62% premium to its shares on April 9, before EQT made its first approach.
Pressure on London Market
This acquisition heaps more pressure on the London market after a raft of UK listed companies have been picked off in recent months, either being swallowed by overseas rivals or taken private. Last week, sweeteners and ingredients giant Tate & Lyle agreed a £2.7 billion acquisition by US competitor Ingredion, ending more than 165 years as a UK-owned firm. This follows the £243.1 million takeover of William Hill owner Evoke by Greek gambling firm Bally’s Intralot, while FTSE 100 insurance firm Beazley agreed in March to be bought by Swiss firm Zurich for £8.1 billion. Asset manager Schroders also agreed to be taken private this year, with a £9.9 billion takeover by US investment company Nuveen.
Intertek's Strategic Review
Intertek has been looking to either sell or spin off its Intertek Energy and Infrastructure division from Intertek Testing and Assurance, with plans to complete the strategic review by the middle of next year. It paused work on the review last month when it said it was “minded to” accept EQT’s latest proposal should it become a firm offer.
Company Background
Intertek is a quality assurance provider to industries worldwide, with a network of more than 1,000 laboratories and offices in more than 100 countries. EQT has said it plans to maintain Intertek’s headquarters in London and will launch a year-long review of Intertek’s business after the deal completes. While no decisions have been made before the review completes, EQT said it was “aligned with the Intertek board’s view that the business could benefit from a more focused portfolio strategy.”
Workforce Impact
EQT said Intertek’s workforce could shrink following the review, but stressed it “does not expect such reductions to be material in the context of the Intertek Group.” It expects to grow Intertek’s workforce over time given its “strategic plans” for the group.
CEO Statement
Andre Lacroix, chief executive of Intertek, said: “This offer represents an attractive opportunity for Intertek shareholders by delivering cash certainty today, and we are confident that Intertek will continue to thrive in the industry.”
EQT's UK Presence
EQT, whose headquarters are in Stockholm, has more than 1,900 staff and offices in more than 25 countries across Europe, Asia and the Americas. Since making its first investment in the UK in 2006, it has invested in more than 50 UK companies and currently owns 13 businesses with headquarters in the UK. Matthias Wittkowski, global head of services at EQT Private Equity, said: “As a growth-oriented investor, EQT is committed to investing in Intertek, with a particular focus on innovation and targeted mergers and acquisitions to enable further international expansion and innovation.”
