Altor's Transcom take-private succeeds

Following a four-month offer period, Altor Fund IV has acquired 90% of the share capital in Transcom Worldwide, allowing for a compulsory purchase of the outstanding shares from remaining shareholders.

Altor's bid was launched on 21 December at a price of SEK 87.50 per share and the acceptance period was extended in late February to run until 10 March. At the expiration of the offer, Altor had received acceptance from investors holding more than 68.4% of Transcom's shares, in addition to the 24.5% stake it had acquired in March 2015 for SEK 421m.

At SEK 87.50 per share, the offer prices 100% of Transcom's share capital at SEK 2.294bn and represented a 36.6% premium on the SEK 64.05 90-day volume-weighted average price of shares leading up to the day of the offer. Subtracting the 24.5% stake held by Altor prior to the offer implies a bid value of around SEK 1.736bn for the outstanding shares.

When first launching its bid, Altor partner and Transcom board member Klas Johansson said in a statement that the GP would like to hasten the strategy it helped the management develop, invest in increased digitalisation and make additional acquisitions, as well as review the structure of the company and cost efficiency. Having been a cornerstone investor in the company for nine months at the time of the take-private offer, Altor believed private ownership would be the best way to achieve its goals for Transcom.

The Swedish mid-market GP's initial investment as a minority shareholder in a public company follows a strategy that has been available to Altor since its third fund, though Transcom is the first such investment by the GP to end in a take-private. Speaking to unquote" in April 2015, Altor founder and managing partner Harald Mix said of the strategy: "Investing in public minorities is not a core strategy we have, but we have a carve-out in the [Altor Fund IV] fund structure that allows us to do that. It represents 12.5% of the fund, so it's not the core of what we do, but from time to time it's a very useful additional tool in our toolbox."

"If you compare the transparency in a well-orchestrated private equity auction compared to a relatively less-researched public entity, you'll find there's typically more hidden value in a public company than in a private arena for a very high-quality business."

Previous funding
Altor acquired a 24.5% stake in Transcom from investment company Kinnevik in March 2015, paying SEK 66 per share, making Altor the largest single shareholder in Transcom at the time. The price valued Altor's stake at SEK 421m.

The acquisition of 6.4 million shares marked the third transaction made through Altor IV, a 2014-vintage €2bn fund domiciled in Sweden, and was the second deal in which Altor has taken a minority stake in a listed company.

Company
Founded by Kinnevik in 1995, Transcom is a provider of credit management outsourcing, including credit reports, debt collection, billing and factoring.

Headquartered in Luxembourg but listed on Nasdaq Stockholm, the company employs 30,000 people in 54 centres in 23 countries.

Transcom had revenues of €626.52m in 2015, with gross operating profits of €123.69m.

People
Altor Equity Partners – Klas Johansson (partner).

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