Investment accounts
Adult accounts
Child accounts
Choosing Fidelity
Choosing Fidelity
Why invest with us Current offers Fees and charges Open an account Transfer investments
Financial advice & support
Fidelity’s Services
Fidelity’s Services
Financial advice Retirement Wealth Management Investor Centre (London) Bereavement
Guidance and tools
Guidance and tools
Choosing investments Choosing accounts ISA calculator Retirement calculators
Share dealing
Choose your shares
Tools and information
Tools and information
Share prices and markets Chart and compare shares Stock market news Shareholder perks
Pensions & retirement
Pensions, tax & tools
Saving for retirement
Approaching / In retirement
Approaching / In retirement
Speak to a specialist Creating a retirement plan Taking tax-free cash Pension drawdown Annuities Investing in retirement Investment Pathways
Marlowe sells software and service assets in £430m deal
(Sharecast News) - Business service and regulatory software company Marlowe announced a deal to divest specific governance, risk and compliance (GRC) software and service assets on Thursday. The AIM-traded firm said the agreement with Inflexion Private Equity valued the assets at £430m on a debt-free, cash-free basis.
It said the move followed its announcement in November regarding a comprehensive review of its operations.
The divestment, representing a significant portion of the GRC segment, translated to a multiple of 16.2x pro forma adjusted cash EBITDA for the financial year ended March 2023.
Around 20% of Marlowe's revenues and 40% of its adjusted EBITDA were accounted for by the transaction.
Marlowe noted that the enterprise value of the divestment surpassed Marlowe's market capitalization by 121% as of 20 February, and based on a three-month volume-weighted average share price as of 21 February.
The company said its core operations, termed compliance services, would continue post-divestment, focusing on its testing, inspection, and certification (TIC) and occupational health (OH) businesses.
It said the net cash proceeds from the transaction would be used to retire the current debt facility entirely and allocate over £150m of surplus cash to shareholders.
Following the divestment, Marlowe said it would intensify its efforts on driving organic growth in its leading TIC and OH businesses.
As part of the transaction, chief executive officer Alex Dacre would transition with the divested assets, and resign on completion.
Kevin Quinn would step in as executive chair on an interim basis.
The board said it had initiated a search for a new chief executive, considering both internal and external candidates.
"This divestment represents an excellent outcome for Marlowe and its shareholders and underscores the significant value that has been created through the delivery of our growth strategy," said chairman Kevin Quinn.
"The valuation achieved demonstrates the substantial potential within our business and will reset our capital structure, giving Marlowe strategic agility whilst delivering meaningful returns to our shareholders.
"Following the sale, Marlowe's business will consist of two market-leading compliance service divisions in Testing, Inspection and Certification and Occupational Health, with a clear and refocused strategy in our core compliance service markets."
At 1347 GMT, shares in Marlowe were up 23.45% at 524.65p.
Reporting by Josh White for Sharecast.com.
Share this article
Related Sharecast Articles
Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.
Award-winning online share dealing
Search, compare and select from thousands of shares.
Expert insights into investing your money
Our team of experts explore the world of share dealing.
Policies and important information
Accessibility | Conflicts of interest statement | Consumer Duty Target Market | Consumer Duty Value Assessment Statement | Cookie policy | Diversity, Equity & Inclusion | Doing Business with Fidelity | Diversity, Equity & Inclusion Reports | Investing in Fidelity funds | Legal information | Modern slavery | Mutual respect policy | Privacy statement | Remuneration policy | Staying secure | Statutory and Regulatory disclosures | Whistleblowing programme
Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
This website is issued by Financial Administration Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) (FCA Register number 122169) and registered in England and Wales under company number 1629709 whose registered address is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.