US private equity predator Advent International is considering venturing into another British tech company, sources say
According to The Mail on Sunday sources, US private equity raider Advent International is considering a dive on another British tech company.
The buyout giant is understood to be among a group of companies circling fraud prevention software specialists GB Group, prompting speculation that a bidding war could ensue. Other interested parties include Hg, KKR, Cinven and Permira.
A source said Advent and KKR have been on and off GB Group over the past year.
Concerns: Private equity firm Advent has bought Cobham and Ultra Electronics
Advent would be a controversial bidder after its controversial acquisitions of pioneering aerospace and defense groups Cobham and Ultra Electronics, which many MPs, pundits and the military have called for blocked.
Cheshire-based GB Group – valued at £1.5bn – was established in 1989 and is one of the largest companies listed on the AIM market. It provides anti-fraud technology for businesses including Revolut, which offers online banking services, and skincare group Charlotte Tilbury. This month it confirmed it was considering a cash offer from private equity firm GTCR.
The Chicago-based suitor has until 5 p.m. Oct. 4 to make a firm offer or leave.
GTCR is in pole position because of its experience in the sector, having owned UK competitor Callcredit, a source said, adding that GTCR has a longstanding relationship with GB Group and is confident of funding a deal.
But another source said it could end in a bidding war with private equity firms actively considering bids. Interest in GB Group follows a wave of potential bids for UK tech companies over the summer. These include cybersecurity company Darktrace, MicroFocus International and Aveva, the provider of FTSE100 industrial software.
US bidders are looking to the UK for deals as the falling pound makes it cheaper for them to buy businesses.
Advent has earned a reputation for sucking UK firms after it secured a £4bn deal to privatize pioneering air-to-air refueling developer Cobham in 2020.
It promised to be a long-term investor after outrage from critics including former Royal Navy chief Admiral Lord West saw the deal curtailed. But it dismembered and sold much of the company within 18 months.
It recently completed a £2.6 billion takeover of Ultra Electronics, which makes sonobuoys for submarine hunting. Fresh fears about Ultra’s future have been raised after Advent recently told staff that some of its departments were “not best settled under the British flag”, according to The Sun.
The Mail on Sunday is able to reveal that profits for Advent International’s UK arm have risen by 150 per cent. According to the latest reports, it earned £14.7million in 2021 versus £5.9million in 2020.
All parties were asked to comment.