Yahoo Finance Former Boat Race Sponsor Xchanging Eyes Sale
A one-time sponsor of the University Boat Race is in takeover talks that would see it set sail from the London Stock Exchange (Other OTC: LDNXF - news) .
Sky News has learnt that Xchanging (LSE: XCH.L - news) , which specialises in managing back office and associated services for insurers and other companies, has been approached by several parties about a deal, including the private equity giant Apollo Management.
At least one large listed outsourcing group is also understood to be in the running to buy Xchanging, while a sector analyst said that other logical contenders would include Advent International, the buyout firm, and Wipro Technologies, the Indian company.
Private equity sources suggested this weekend that bidders were likely to offer in the region of 160p-a-share for Xchanging, a roughly 55% premium to Friday's closing share price of 110.75p.
The outsourcer has a market capitalisation of £275m, meaning that a takeover is likely to value it at about £400m.
Xchanging is likely to have to issue a statement confirming the talks, which have been under way for some time, as soon as Monday.
Bankers at Goldman Sachs (NYSE: GS-PB - news) are understood to be advising Apollo, while Xchanging's corporate brokers are Investec (LSE: INVP.L - news) and Liberum. Other banks are also said to be involved in the situation.
Xchanging, whose biggest clients include Lloyd's of London, the insurance market, blamed disappointing first-half results on the poor performance of its procurement business.
The company's shares are down nearly 40% over the last year, and it is without a permanent chief executive, having announced last month that former HP Enterprise Services executive Craig Wilson would take over later in the year.
A formal bid for Xchanging would follow a recently agreed takeover of Innovation Group (Other OTC: INVGF - news) by Carlyle, another buyout firm, and underline the opportunities
The bid talks could make it unlikely that Mr Wilson will now join Xchanging, which floated on the London market in 2007 with a market value significantly higher than it has now.
The listing enabled David Andrews, the company's founder, to cash in a substantial paper fortune, while Ken Lever, the most recent chief executive, said in July:
"There are a number of variables to the potential full year outcome including progress on the reorganisation of Procurement, the timing of Xuber [an Xchanging product] contract wins and currency rates.
"The outlook for the full year is a trading performance in line with last year and a return to profit growth in the full year 2016.”
Xchanging, which ended its sponsorship of the Oxford-Cambridge Boat Race in 2012 after an eight-year association, and Apollo both declined to comment on Saturday.
