Eckoh agrees to be acquired by Bridgepoint funds

Secure payments and customer engagement software provider Eckoh announced on Wednesday that it has agreed to be acquired by Eagle UK Bidco - an indirect subsidiary of funds managed by Bridgepoint Advisers II.

The AIM-traded firm said the acquisition valued its fully-diluted share capital at £169.3m, translating to 54p per share in cash, a premium of 11.34% over its closing share price on 21 August.

It also implied a valuation multiple of 15.9 times Eckoh’s adjusted EBITDA for the year ended 31 March.

Bridgepoint said it saw significant potential in Eckoh’s unique positioning within the growing secure payments sector, with plans for geographic expansion, product development, and potential acquisitions to drive sustainable growth.

The transaction would proceed via a court-sanctioned scheme of arrangement, although Bidco retained the right to switch to a takeover offer if necessary.

Eckoh said its management and independent directors had unanimously endorsed the acquisition, citing favourable terms that recognise the company’s value.

As part of the acquisition terms, Bidco had secured irrevocable commitments from certain shareholders and key executives, including chief executive Nik Philpot and chief financial officer Chrissie Herbert, who would roll over portions of their holdings in exchange for Bidco equity.

Oryx International Growth Fund, a major Eckoh shareholder, said that it expected to benefit from a boost in its net asset value by about 10p per share, and would receive £8.1m in cash on completion.

The acquisition, conditional on shareholder approval and foreign investment clearance, was projected to complete in the first quarter of 2025.

“Over the past decade Eckoh has established itself as a global leader in customer engagement data security,” said chief executive officer Nik Philpot.

“We're trusted by over 200 enterprises to solve a very significant mass market problem - keeping their customer's data private and secure when transacting with them in a virtual arena - and we can do this via any engagement channel the customer chooses.

“Our team has been making excellent progress where we see the biggest opportunity for growth, with momentum building in North America, but we need to accelerate investment in our product roadmap and our go-to-market strategy to drive forward important initiatives and to capitalise on the opportunity.”

Philpot said the continued investment requirement came against a backdrop of larger enterprise opportunities, bringing more complex and longer sales cycles that were harder to predict from a timing perspective.

“Working together with Bridgepoint we believe we can make faster progress towards our mission to make the world more secure and to set the standard for secure interactions between consumers and the world's leading brands.”

At 1153 GMT, shares in Eckoh were up 26.19% at 53p.

Reporting by Josh White for Sharecast.com.