U.K. software company Blue Prism agrees to $1.5 billion sales

September 29, 2021: -British software company Blue Prism said Tuesday it has agreed on a deal to be taken over by private equity firm Vista Equity Partners for £1.1 billion in cash.

Blue Prism, specializing in software robots that automate repetitive tasks, said Vista would pay each shareholder £11.25 for each share, a 35% premium to the company’s last closing price of £8.32.

It’s the latest in a string of private equity deals for publicly-listed software companies. Security firm Proofpoint agreed to a $12.3 billion sale to Thoma Bravo, while Cloudera is being bought by KKR and Clayton, Dubilier & Rice.

Blue Prism is also among many British firms that have attracted interest from U.S. private equity investors. Supermarket chain Morrisons, infrastructure company John Laing, and aerospace firm Cobham have all targeted takeover bids in recent months.

After the acquisition, Vista said it intends to indirectly transfer Blue Prism to portfolio company TIBCO, an enterprise data firm.

“Combining with Vista and TIBCO will ensure we remain at the forefront of the next generation of intelligent automation,” said Jason Kingdon, chairman, and CEO of Blue Prism.

“We can expand the range of products we offer our customers, with TIBCO’s global footprint and technologies; and, as a privately owned company, we will also have greater access to capital to pursue new growth opportunities via product investment and other potential M&A.”

The price for Blue Prism marks a significant discount to U.S.-based rivals such as UiPath, the New York-listed company with a $28 billion market cap, and Automation Anywhere, which was last privately valued at $6.8 billion.

Shares of Blue Prism sank 2.6% Tuesday morning.

Activist investor Coast Capital had expressed concern about the company’s valuation amid speculation it was set to be taken over by private equity buyers.

“The Enterprise Value of Blue Prism PLC is currently valued at approximately three times forward revenues – an 80% to 90% discount to the company’s peers including UiPath, Appian, WorkFusion, Automation Anywhere, etc.,” the letter from Coast Capital said.

“Were a buyer to pay a premium of 100%, the share price would still be materially less than its intrinsic value, and well below where the shares were trading as recently as January 2021.”