Deal sealed

KKR secures backing for £1.3bn takeover of SMS

Smart Metering Systems
The SMS offer has received support from shareholders

US private equity company Kohlberg Kravis Roberts has secured its £1.3 billion takeover of Glasgow-based Smart Metering Systems.

The bid was declared unconditional last night after receiving 62.78% of votes from SMS shareholders. The deal is one of the biggest acquisitions of a Scottish company in recent years.

A newly-formed company wholly-owned by funds advised by Kohlberg Kravis Roberts & Co and its affiliates, announced the recommended cash offer on 7 December. SMS shareholders will receive 955p for each share they own.

SMS has confirmed that it will not pay the third and fourth FY 2023 dividend Instalments which were expected to be paid on 25 April and 25 July, and confirms that no further dividends will be paid until further notice.

Two representatives of KKR, Andrew Furze and Yimei Luo, are expected to be appointed as non-executive directors to the SMS board. Ruth Leak, James Richards and Mike Winkel are each expected to step down shortly as an independent non-executive director of SMS.

The chairman Miriam Greenwood and the other remaining independent non-executive director on the SMS board Graeme Bissett will resign.

The deal had faced opposition from SMS founder Steve Timoney and its former chief executive Alan Foy, who joined a long term shareholder.

Mr Timoney, who will make £51 million from the acquisition, together with Mr Foy and PrimeStone Capital, collectively controlled 23,827,659 ordinary shares representing approximately 17.8% of SMS’s issued share capital.

In a statement issued at the end of December they said they were “disappointed” with the 955p cash offer.

There was a change to the terms of the deal when it was changed from a scheme requiring a 75% majority to a straight offer requiring a simple majority.

Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.