Volpi to acquire Digital Barriers' video division for £27.5m

The deal will see Volpi pay £25.5m on completion, with the remaining £2m payable subject to the newly independent company securing a specific trading contract within 12 months of completion.

The transaction is subject to shareholder approval, with the board unanimously recommending a vote in favour of the terms and providing irrevocable undertakings to sell a combined 6.8% stake. Schroders Investment Management, which holds a 20% stake in the company, has also provided a letter of intent to vote in favour of the deal.

The Digital Barriers board said in a statement that the offer represents "good value for shareholders and appropriately values the future growth of the video business against the uncertain nature and timing of that growth".

Volpi, which makes pan-European investments in the technology, media and telecommunications sector, is currently in the process of raising its maiden closed-ended vehicle. The fund is targeting €300m to invest in companies with enterprise values of up to €200m and recently received a commitment from Terra Firma chairperson and founder Guy Hands.

Digital Barriers shareholders will vote on the proposed deal at a general meeting on 26 October. The transaction would see the group's CEO Zak Doffman and a further 127 employees joining the new standalone company.

According to a statement, the video division of Digital Barriers generated revenues of £24.5m in the year ending in March 2017, with an operating loss of £15.2m.

The proposed divestment follows an internal review carried out by the listed group, which found there was little strategic overlap between its video and people screening operations. The review concluded that the video group in particular faces challenges related to an unpredictable sales cycle and an over-dependency on larger sales that are part of complex budgets and delivery schedules.

The Digital Barriers board is proposing that the remaining people screening business be rebranded as Thruvision Group following the deal.

Digital Barriers was founded in 2009 and is headquartered in Abingdon, Oxfordshire.

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