(Reuters) -British energy infrastructure company Smart Metering Systems(SMS) said on Thursday U.S. fund KKR will take it private in a 1.3 billion pound ($1.63 billion) deal, setting it up to join the growing list of firms leaving London bourses.
The 955 pence-per-share all-cash offer represents a premium of 40.4% to the London-listed stock's Wednesday close.
Shares in the AIM-listed company surged more than 42% to an over two-year high of 969 pence in early trading.
SMS said its directors intend to unanimously recommend that the shareholders vote in favour of the acquisition, done by a newly-formed company owned by funds advised by KKR and its affiliates.
"KKR believes that SMS, under private ownership, will be able to accelerate its growth and continued transition from a metering provider and grid-scale battery storage operator to a fully integrated, end-to-end energy infrastructure company," the U.S. fund said in a joint statement.
Glasgow-headquartered SMS provides end-to-end service in
metering and other carbon reduction assets and employs about 1,500 people, primarily in the United Kingdom.
If the deal gets shareholders' approval, SMS will join the growing list of companies leaving London this year, fuelling fears that the capital is rapidly losing its appeal as sluggish trading and low valuations drive firms away from its stock market.
Tech firm Sopheon, another AIM-listed company like SMS, in October agreed to key terms for a possible takeover by Wellspring Worldwide, while biotech-focused global venture capital company Arix Biosciences was taken over last month by biotech venture fund RWF Biotech Opportunities.
Among the blockbuster names, British chip designer Arm Holdings made its Nasdaq debut in September, preferring the U.S. financial hub of New York over a return to the London stock market.
In August, Irish construction company Kingspan dropped its London trading, while Dublin-based building materials giant CRH earlier this year moved its primary listing to New York, opting for a secondary listing in London.
($1 = 0.7964 pounds)
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Nivedita Bhattacharjee and Emelia Sithole-Matarise)