Upcoming Conferences

Hytera makes £74 million cash offer for Sepura

Date: 16th December 2016
Topic: News
Author: Sam Fenwick
Hytera, Sepura
Tags: Hytera, M&A, Sepura


Hytera and Sepura have agreed on the terms of an approximately £74 million cash offer by a Hytera subsidiary for the whole of Sepura’s ordinary share capital. Under the terms of the agreement, Sepura’s shareholders are entitled to receive 20p per share in cash. According to a statement on Sepura’s website, the acquisition is expected to be complete in 1Q17.

Part of the rationale behind the move is Hytera’s belief that it will give the company “better access to geographic markets in which it currently has limited exposure,” and will increase its presence in the high end public security market. 

The statement also says that: “Hytera believes that Sepura’s dedicated research and development function, which oversees and develops the core patents and technologies relevant to the TETRA protocol, is of very high quality. However, given the very significant technological changes and challenges that are likely to characterise the PMR market in the years to come, Hytera believes that Sepura will be better positioned with the extensive research and development and financial support of Hytera.” 

The announcement follows a period of difficult trading for Sepura, due to “Underperformance of its DMR business, delayed refresh cycles and uncertainty over the Emergency Services Network in the UK”, together with a major change in its business model. Therefore, the company announced a pre-tax loss of €62.1 million earlier this year for the six months ended 30 September 2016. It also reached an agreement to defer “certain debt repayments with its lenders” and expected that it would require a waiver of some covenants from its lenders from March 2017. 

The price agreed for Sepura represents a 35.6 per cent premium over Sepura’s share price of 14.75p per share on 3 November 2016 (the last business day prior to the beginning of the offer period). Sepura’s directors unanimously recommend the scheme to Sepura’s shareholders, having “…concluded that the proposal from Hytera substantially recognises Sepura’s prospects whilst also recognising the considerable challenges facing the business on a standalone basis,” according

The cash offer will be made by Project Shortway Limited (“Bidco”), an indirect wholly-owned subsidiary of Hytera. A scheme document that sets out the full details of the acquisition and its expected timetable will be sent to Sepura’s shareholders within 28 days, unless Hytera, Sepura and the Takeover Panel agree to a later date.

"This transaction with Hytera recognises the underlying strengths of Sepura's technology and customer base despite the difficulties of the last 12 months,” said Alan Lovell, Sepura’s chairman. “It will provide certainty for our shareholders, and secure the future of the business. There will be additional opportunities and benefits for the business and its employees as part of a larger group."

"We are very pleased to reach this agreement with Sepura,” added Chen Qingzhou, Hytera’s chairman and CEO. “The industry in which we operate is undergoing significant changes and Sepura represents an excellent strategic fit for Hytera and will allow us to expand the range of products and services we provide to our clients around the world."

Image: Sepura's HQ

Leave a comment

  • Captcha Code
    Click the image to see another captcha.
  • Submit